David Mckee's Stiffs & Georges - Tropicana Entertainment

Hope for Boardwalk?

Tue, 13 Oct 2009 16:08:00 -0700

As you know, S&G puts more stock in year/year comparisons than sequential ones, but the most recent set from Atlantic City affords a slender reed of hope. With the help of tighter slots, A.C. held its September decline to 6%, the lowest of 2009 and the smallest drop in over a year. Even perpetual dog Resorts International had a good month, up 4% y/y.

Both in dollar volume ($63 million) and growth (6%), the leader was -- no surprise -- Borgata. In fact, the Boyd Gaming property made more than the four lowest-grossing properties (Resorts, Atlantic City Hilton, Trump Plaza, Trump Marina) combined. The two lesser Trump properties slipped below the Colony Capital ones, so one doesn't know whether to feel good for Colony or sorry for Trump Entertainment Resorts. The handover of Resorts Int'l continues to proceed slowly, as regulators enter uncharted waters with understandable caution.

Percentage-wise, Showboat, the Hilton and the Plaza had the worst of it, while gainers included Harrah's Atlantic City (3%) and even the Tropicana (1%). But the bloom is off the Trump Taj Mahal rose; it fell back to the middle of the pack, grossing $36 million.

One unexpected factor in the city's bump was a late-September, gay-themed promotion at the four Harrah's Entertainment properties. For all the lip service paid, year after year, to diversifying Atlantic City's appeal, Don Marrandino and his Harrah's colleagues backed up the talk with meaningful action.

Dead casino walking: Trump Marina

Back at Trump, its CEO, Mark Juliano declares "The real question is how long until we get back to the results we saw in past years, which is the question everyone in every business has." No, the real question is: On what planet is Mr. Juliano living? And: Do they have oxygen up there?

The math is inexorable. Excluding three months of sub-2% growth, Atlantic City's revenues have going one way -- down -- for the last seven quarters, often by double-digit margins. Casinos in Pennsylvania continue to ramp up, Delaware is talking very seriously about casino expansion, slot parlors in Maryland are in train and then there's prospect of additional competition from the greater New York City area.

Instead of asking "Where are the snows of yesteryear," S&G modestly suggests the Boardwalk's casino braintrust ought to be thinking about how to move forward into a future of diminished (i.e., more realistic) expectations.

Up the road, now that the novelty factor has worn off of Sands Bethlehem (above), the $724 million casino remains mired in fifth place. The solution? More and bigger promotions, it would appear. Judging by the lukewarm response to Sands and to Rivers Casino, the Pennsylvania market isn't big enough to support casinos built with Vegas-sized budgets.

Trop, Sands purges continue

Wed, 30 Sep 2009 17:36:00 -0700

It's official: "Pit Bull of Comedy" Bobby Slayton has snarled his last at the Tropicana Las Vegas. Thus endeth a brief, inauspicious reign by Anthony Cools over the Trop's upstairs showroom. A well-placed source advises LVA that Beatles tribute show Penny Lane was pulled after EMI hit it with a cease-and-desist letter. In any event, it left as invisibly as it arrived.

Trop CEO Alex Yemenidjian still has three shows he inherited from predecessor Scott Butera but it's pretty clear that he's going to put his own stamp on the property. As for Cools, well, he'll always have O'Shea's.

Movement at Cosmo. Buried in the Review-Journal (six items deep) is the news that the Cosmopolitan has wooed ~~John~~ Marshall Andrew away from Las Vegas Sands to be its CFO and hired Station Casinos refugee Marshall Andrew as chief information officer. Deutsche Bank looks serious about making that September '10 opening date.

Will the economy have improved sufficiently to have absorbed most of the CityCenter rooms and the Planet Hollywood Westgate ones by then (and maybe, but not very likely, Fontainebleau)? Boyd Gaming is betting otherwise. The Echelon cranes have been seen coming down, marking an additional hiatus in the project, which reportedly will not be resumed until 2012.

Las Vegas Sands: Execs overboard!

Andrew is just the latest exec lured -- or chased -- away from Sheldon Adelson's employ. Former Venetian veep Paul Pusateri (who helped launch Paris-Las Vegas back in the day) was just nominated as president at The Palms and ever-helpful Sands spokeswoman Mindy Eras has gone to Preferred Public Relations. Whether these moves are part of Adelson's promised cost reductions or are a winnowing out of perceived William Weidner loyalists, it must be getting lonely at the top.

There's quite a debate going on at the Las Vegas Sun on the rise and fall of themed resorts on the Strip. Surf over, check it out, maybe weigh in, if the spirit moves you.

Big Trop shakeup

Thu, 24 Sep 2009 17:16:00 -0700

During his absent-minded interregnum as Tropicana Las Vegas CEO Scott Butera nearly denuded the casino of on-property entertainment. Only the hasty re-signing of Xtreme Magic left the Trop with a show in the house. Over time, Butera's people added a slew of second- and third-tier acts.

"Too much," said some. Those "some" would appear to include new CEO Alex Yemenidjian. Virtually unpublicized Beatles tribute act Penny Lane? Gone. Impressionist Rich Natole? Going soon. Bobby Slayton? Going a little later, perhaps. (Anthony Cools' track record as a producer is looking dire.) Although I've heard good things about the new venue created for Soprano's Last Supper and Hypnosis Unleashed, apparently they will be relocated elsewhere within the Trop.

To no one's surprise, Dirk Arthur will yield the prime-time slot (where he was, in all honesty, a placeholder) to incoming Wayne Newton. The Wayner will keep the Tiffany Theater warm until a Trop-owned show replaces Newton's morbidly titled Once Before I Go.

The Harmon Theater's ill-publicized Tickled Pink has also closed and it sounds as though that place is experiencing cash-flow problems. Normally, I'd be sanguine that departing acts would soon find new homes elsewhere in town. However, in these desperate times, entertainment has been one of the first items on the chopping block, so the evicted performers can probably use all the positive vibes they can get.

Casino explosion in Ohio? Not only will Buckeye State voters get to say "aye" or "nay" to Gov. Ted Strickland's creation of racinos, the state could get as many as 11 gambling venues -- not the seven Strickland envisions. Another ballot measure (pushed by Penn National Gaming) would authorize four casinos in four major Ohio cities. Minimum capital investment will be $250 million and the tax rate would be set at -- Ouch! -- 33%. Somehow, I doubt that will scare anybody away.

And they're off! Congratulations to Ocean Downs, the first racino approved in Maryland. By June, reels should be spinning on the first 200 of an eventual 800 slots, to be fully phased in within 11 months.

Go ask Alex

Wed, 23 Sep 2009 18:04:00 -0700

Without further ado, we present S&G's much-hyped interview with Tropicana Las Vegas CEO Alex Yemenidjian, a trim, nattily attired man of impeccable manners and refreshing directness, as you will see. I led off with questions from the readership ...

Nelson asks, “What’s your game plan for motivating the staff into offering quality service to your guests?”

First of all, we have a lot of staff that’s already very motivated. When I took over here, it was a very pleasant surprise to see that there is this reservoir of good will. Many of the employees have been here a long time. They love this place, it’s home for them, they are proud of it and they are happy to be part of the future of it, and they’re very excited because these changes that we are proposing is something that they have been waiting for for a very long time.

In addition to that reservoir of good will, we’re going to be implementing a new training program, a new guest-service-quality program to make sure we elevate the service to a whole new level. So I think the combination of those is going to do the trick.

The last time I walked the property, it was very lightly staffed. I saw two maids to a hotel floor, even on a floor with 44 rooms. Rockymet asks, “Will they staff a full size cleaning crew [and] will they spruce up what is/was one of the best pools in Vegas?”

The answer to the first question is, yes, we’re actually increasing our staff in many areas. We’re reducing in certain areas and increasing in others, as the particular area dictates – particularly in the area of guest-room attendants. One of our objectives is for our new rooms that we are designing to look perfect at all times. It’s a whole new image, it’s a whole new brand that we’re putting forward, so we want to make sure that service matches the new brand.

As far as the pool is concerned, [the question is] very timely. I just finished final touches of the design this morning. We will be getting permits by December 1 so that we can open the new pool area by April 1, which is the beginning of the next summer season. We recognize that the pool area is renowned and we want to make sure that we do it justice, so we’re going to be spending a little more money than we originally thought. [smiles] But it’s going to be wonderful.

Jeff in Oklahoma City wants to know if Onex Corp. “is keeping the property warm for MGM until [MGM’s] debt structure gets better” and if this your way back to MGM Mirage?

I can speak for Onex when I tell you that they are not in the business of keeping things warm for anybody.

Your proposed executive team for the Illinois casino you were seeking included Karen Sock and Joe Billhimer, a couple of heavy hitters in the business. Are they or any other well-known executives going to be joining you at the Trop?

At the moment we have an excellent team here. I am very proud of my team. I actually have a team that I wouldn’t trade for any other team in Las Vegas at the moment. As our company expands – and Onex and my intention is to expand by either acquiring new ones or building new hotels – hopefully we will have more openings and more opportunities to have people like Karen and Joe join the team.

Does that mean Trop President Ron Thacker is staying on?

Ron hasn’t been here. Ron decided to retire. He had actually come out of retirement to take this job as a favor to Tropicana Entertainment.

How serious are the deferred-maintenance issues you’ve had to address?

Well, we were spending a significant amount of money on the deferred maintenance that was left to us, courtesy of the previous owners. We addressing all issues, including roof, elevator, escalator – all items of deferred maintenance that have been ignored for a very long period of time, and we are spending whatever it takes to make sure that the property comes up to a top-notch level.

You’ve said that one of the priorities was redesigning the buffet, but what about the food itself? I’ve eaten there and it was one of the worst buffets in Las Vegas.

I agree with you. Lucky for us, you ate there with the previous chef. We have just hired a new chef. He is in the process of changing the quality of the food. He hasn’t gotten to the buffet yet; he is very busy right now in the new restaurant we just opened, an Italian restaurant called Bacio. Pretty soon he’s going to move from there to significantly improving the quality of food at the buffet.

The last I read, Dirk Arthur was on an interim contract, into the autumn. What’s his status going forward?

I think he had a six-month contract. I’m not quite sure when it expires. We’re really quite happy with Dirk Arthur. But we don’t have any particular plans one way or the other. We’re just happy to have him.

How are you able to incorporate Let’s Make a Deal without significant interruption? What kind of infrastructure is involved with having a TV show where Bodies and Titanic used to be?

That’s the pavilion space. It’s 55,000 square feet. It was really sort of custom-made for this kind of a production. We really don’t have much disruption. We have a really large property – 34 acres and we have plenty of space for the additional traffic that is being created.

We welcome the traffic. A little bit of commotion is fun in a casino. It’s actually funny because [contestants] come in these great costumes, walk in and out. We have some major events planned in the pavilion but it turns out that the taping of the first 50 shows will be complete by the time we need to [switch].

You’ve outlined a very ambitious, multi-phase program of changes. How are you going to execute all of that on $175 million, considering how expensive construction and renovation have become in Las Vegas?

Two things. One is, because of the current economic conditions, we are getting at least 30% discounts on all material and all labor. So we only pay $70 million for something that costs $100 million. If we were building this two years ago, it would have been a very different story.

The second aspect to that is that, as you undoubtedly know, a lot of construction projects here in Las Vegas are done with little regard for budget and sometimes people end up overspending. We can’t afford to do that, so we have to make sure that every dollar that we spend counts as $5.

So we are being very cautious and very smart and very careful about making sure that every dollar that we spend, we have an opportunity to impress the customer. And the combination of that and the fact that we’re getting unbelievable bids for the work means that if we announce a $150 [million]-$175 million project, it’s really equivalent to spending $300 million-plus.

Ask Alex!

Tue, 22 Sep 2009 17:31:00 -0700

Tomorrow morning, I have scored some precious face time with Tropicana Las Vegas CEO Alex Yemenidjian. The ostensible topic of the media event is "Special Guest," er, Wayne Newton.

But screw that. Let's find out what else is going on at the Trop, particularly in terms of capital improvements, staffing, Let's Make a Deal tapings and all those deferred-maintenance issues Yemenidjian inherited from his predecessors.

So here's the idea: If you've got questions, submit them in the "Comments" section (or by e-mail at dmckee@huntingtonpress.com) and I'll use the best ones in my interview. I already had plenty of queries of my own but changed my mind and decided to try and get you guys (and gals) in on the fun.

So what's on your mind, Trop-wise?

Worst Trend Yet

Thu, 17 Sep 2009 20:07:00 -0700

This is the sort of bottom-feeding move you'd expect from Columbia Sussex but not from Hyatt. Suffice it to say that if casino-hotels try this cheapjack number in Atlantic City, Detroit or Las Vegas, there will be holy hell to pay, especially the next time the collective-bargaining agreement is up for renewal. As it is, some hotels (*cough*Tropicana Las Vegas*cough*) have tried to operate with skeletal cleaning staffs and one shudders to imagine the consequences.

Meet the new Trop boss ...

Wed, 26 Aug 2009 16:29:00 -0700

... largely the same as the old boss. Tropicana Entertainment's diligent efforts to get back into the Tropicana Atlantic City have finally paid off. Thus (nearly) ends a prolonged interregnum during which no clearly superior alternativves emerged. Well ... there was an extended flirtation with Cordish Gaming but butterfingered trustee Justice Gary Stein fumbled that away.

Since Carl Icahn's stealthy buy-up of TropEnt stock extinguished Columbia Sussex CEO William J. Yung III's ownership rights, the era of Attila the Yung has finally ended. Also, getting Stein out and private ownership back in is a transition that can't happen soon enough.

On the downside, Trop property prexy Mark Giannantonio (a Yung appointee) remains at the helm. Also, TropEnt CEO Scott Butera and his lieutenants did an undistinguished job of running the Tropicana Las Vegas before selling it to Onex Corp. They still have a lot to prove in Atlantic City.

Quote of the Day

Sat, 22 Aug 2009 16:13:00 -0700

"I have been pleasantly surprised by the tremendous reservoir of good will that exists in our work force ... Considering how previous administrators have neglected the property, neglected the operations and neglected the employees, it was very refreshing to find that despite all that neglect so much pride and passion can be harnessed. And regardless of what happened in the past, I am keenly aware that change can be scary for many of our team members. But change also irrigates the human condition." -- Tropicana Las Vegas CEO Alex Yemenidjian, on the future of the property.

I was just saying ...

Wed, 12 Aug 2009 12:55:00 -0700

... to a colleague that, given Atlantic City's dismal July numbers, a plea for governmental assistance had to be just 'round the corner. Well, whaddya know? In at least five instances, Atlantic City's casinos are run by companies that just reported profitable quarters, while four more just changed hands for pennies on the dollar. Not to mention that Colony C(r)apital, owner of the remaining two, supposedly was willing to put some or all of $244 million into bankrupt Station Casinos.

I don't mean to sound unsympathetic, but ... considering that Garden State citizens are being asked to tighten their belts, forego tax rebates and the like, if the casino industry needs $20 million to market itself then it can damn well pass the hat and raise the cash in-house. Besides, there's something unseemly about "pull yourself up by your bootstraps" capitalists clamoring for guvmint subsidy, especially in a state filled with people who are in much greater need. (Yes, I know these are interconnected issues but we're talking casinos that gross hundreds of millions of dollars every month. They're not exactly paupers.)

The article's final paragraph (misleadingly) implies that Trump Entertainment's three casinos, the Tropicana Atlantic City and the two Colony properties are all in danger of closing. But might Atlantic City be better off with five -- or six, if Revel can be finished -- strong casinos, whilst the sicklier ones are put out of their misery?

A reader posed that question to me ... and now I pass it along to you.

Carl Icahn, comedian?

Tue, 11 Aug 2009 16:02:00 -0700

"As a result of [Tropicana Entertainment's] continued use of the Tropicana marks in interstate commerce, the Tropicana marks have achieved fame and notoriety and are associated in the minds of consumers nationwide with a consistent level of high-quality casino, entertainment and hotel and restaurant services." -- from court filings by Tropicana Entertainment, proud owner of the Tropicana Express in Laughlin, proprietor of the Horizon in Lake Tahoe (above) and evicted operator of the Tropicana Atlantic City. Uh, yeah, that "notoriety" part is right on the money. TropEnt is suing the Tropicana Las Vegas to enjoin it from using the "Tropicana" name.

New flavor of Tropicana; M is infectious; Penn is persistent

Fri, 07 Aug 2009 14:05:00 -0700

Alex Yemenidjian has busted out a new logo for his Strip casino:

Hey, it's a start. Still no word on a new evening show for the Tiffany Theater (and somehow I don't think Dirk Arthur is going to cut it as a long-term proposition). Anything being possible, perhaps trademarking a new logo will circumvent that "Tropicana" lease-back clause that Tropicana Entertainment CEO Scott Butera snuck past Yemenidjian ... but the Tropicana Las Vegas had better set aside $2 million just in case.

Success breeds development. With M Resort a smash right of the box, naysayers to the contrary, it's proving to be the catalyst for at least one more casino development. The shrouded-in-mystery Raymond Shapiro project would sit immediately north of M and would -- especially if M's amenities get fully built -- synergize with the additional retail/amusement development that are in M's plans.

Industry wisdom, validated by experience, maintains that casinos do better when clustered -- and the Anthony Marnell III and proposed Shapiro properties might even get Gary Goett's long-stalled Olympia Gaming project out of its holding pattern. (It would be on the opposite site of Las Vegas Boulevard from the Shapiro parcel, closer to I-15.)

The loser in all of this is Station Casinos' stuck-in-limbo Inspirada casino project. By the time both that and the master-planned community upon which it was predicated are ready to go, Shapiro and Goett could be as firmly entrenched as Marnell. But, in this lending climate, the operative phrase for any casino proposal remains, "Show me the money."

Penn to locals: "Screw you." For execs at Penn National Gaming, fortifying themselves against competition from in nearby counties supersedes the good will of their constituency. In Jefferson County, home to Charles Town Races & Slots, voters rejected a request for table games in a 2007 vote that went 56%/44% against Penn.

Undeterred, Penn is going to get back in voters' grille this November, it appears, by dint of either the Nov. 7 ballot or a special election a month later. According to J.P. Morgan analysts, the Jefferson electorate is pondering zoning restrictions "to slow down the influx of people from the greater Washington, D.C. area and the conversion of farms to subdivisions." If that's indeed the temper of the neighborhood, Penn's persistence in trying to drive more traffic into the area seems perverse ... if understandable from a dollars-and-cents standpoint.

Aztar deal the worst ever: it's quantifiable

Tue, 28 Jul 2009 12:39:00 -0700

When he acquired Aztar Corp., back in 2006, Columbia Sussex CEO William J. Yung III also became one of the company's debtors. So what's his $36 million worth today? According to the Wall Street Journal, 100 grand or less. If that weren't enough to make the ColSux/Aztar deal the all-time biggest casino-sector wipeout of the last 15 years, consider that Carl Icahn's "$200 million" credit bid (i.e., no money down) was placed with debt acquired at 27 cents on the dollar. So Icahn has himself a new casino for a tidy $54 million outlay.

In a less-reported development, Icahn also gained a controlling position in Tropicana Entertainment. Without either its Atlantic City or Las Vegas Trops, it'd be a car without an engine, a gaggle of riverboats and motels. Exactly where this leaves CEO Scott Butera and what role he'll play remains an open question. Hopefully, either his or Icahn's first move in Atlantic City will be to replace floundering Trop General Manager Mark Giannantonio (a Yung crony) with someone more up to the job.

Movement at Cosmo: The GM of Caesars Palace, John Unwin, has resigned. He'll become CEO of the stalled Cosmopolitan in October. While it's still unclear under whose aegis the casino will be run, Unwin's hiring is the first concrete move to get some gaming expertise on board since Deutsche Bank seized the property.

Whining in Macao: Those two "integrated resorts" in Singapore haven't even opened yet and won't for another half a year, but Stanley Ho (whose venerable Hotel Lisboa is seen above) already has his panties in a bunch. According to Bloomberg News, the ancient casino oligarch has been wringing his hands about the burdensome, "serious issue" posed by Macao's 39% tax rate.

Boy, Singapore must be a more serious threat than I'd given it credit, if it's got a Communist Party suck-up like Dr. Ho all a-twitter and taking issue with the government. He's still in better shape than his American rivals; the attempt to graft Vegas-style megaresorts onto Macao has left them badly exposed to anemic market conditions. Ho's gambling-centric strategy gives him less cause for worry.

Today Singapore, tomorrow the U.S.? Even while lender's remorse has paralyzed American banks and stalled any hopes of "unbundling" the U.S. casino industry, diversification may be coming from an unlikely corner. Malaysia's Genting Bhd, riding a sustained runup in its stock, has $2 billion in the kitty, is raising more and could pump $7 billion into casino acquisitions.

That isn't to say there aren't a lot of "ifs" and "buts." Still, Genting's fundamentals appear far more sound than those of say, Las Vegas Sands. It's also in a position to deal a serious blow to Sands in Singapore. Not only will its Sentosa Island casino-resort open before Marina Bay Sands, but customers who "subscribe" to a $1,388/year entrance fee to one casino or another must play exclusively at that casino for the year. Once again, Sheldon Adelson's inability to finish a megaresort on schedule threatens to bite him in the butt.

A Trop by any other name

Mon, 27 Jul 2009 17:05:00 -0700

Icahn Capital, which purchased the Tropicana Atlantic City for $54 million, effectively, is projecting a conservative course for the property. Any sort of expansion is being ruled out for now, due to skepticism about "green shoots" of economic recovery.

Speaking of distrust, the New Jersey Casino Commission still needs to be convinced that Icahn's preferred operator, Tropicana Entertainment, isn't a stalking horse for Columbia Sussex CEO William J. Yung III. (Both companies employ the same corporate mouthpiece, for instance.) Besides, if ties between TropEnt and Icahn are severed, what becomes of the "Tropicana" name?

(Also, calling TropEnt's eight raggle-taggle, non-Vegas/Atlantic City casinos an "empire" is pretty generous. A series of minor duchies and prinicipalities? Yeah, that's more like it.)

It doesn't look like a standalone A.C. Trop would have ownership of its name, as that remains with the "OpCo," that "empire" under which all the miscellaneous former Aztar Corp. and ColSux casinos are bunched. Tropicana Las Vegas boss Alex Yemenidjian apparently didn't read the fine print and may have to shell out $2 million a year to keep the name that is, along with its land, the LV Trop's main equity.

Would a Trop by any other name be just as marketable? One highly doubts it.

The Wild, Wild Midwest. Back in Illinois, the guvmint continues to take a "Ready, Fire, Aim!" approach to its management of the casino business. In his zeal to get slot routes up and running, Gov. Pat Quinn didn't appropriate extra moolah or manpower to ride herd on the influx of new gambling devices.

So, if you're a bar owner in the Land of Lincoln, it's a free for all. The state's casino owners, meanwhile, will probably have to wait until at least early next year before any financial relief makes its way through the Lege. Illinois isn't just killing the golden goose; it's serving it for lunch at the governor's mansion.

Suing the Chairman. One of the many interesting revelations in the Terrance K. Watanabe lawsuit is that Harrah's Entertainment created a special "Chairman" tier of players in his honor. (Take that, you Seven Stars members!) Watanabe's counterfilings against Harrah's also allege confidential agreements between the company and the high roller whereby he had a two-month (or greater) window of time to make good on his markers.

The documents further allege that Harrah's violated the agreement by cashing in the markers early. It sounds more and more like Watanabe has Harrah's CEO Gary Loveman by the short hairs. If the covenants can be substantiated, then Harrah's made a loan -- which is unenforceable -- and may have been in breach of contract. The company better get ready to eat $14.75 million. Compared to the nearly $300 million Loveman just wrote off, that's walking-around money.

Not that Watanabe is a pitiable victim in this drama. Seems he was rather a prima donna, dictating which employees would and would not dance attendance upon him. He was also able to have gambling tables and slot machines moved into special curtained alcoves, the bettter to squander his wealth in seclusion. To paraphrase Fitzgerald and Hemingway, the rich are not like you and I; they have more neuroses.

Trop and tribulation

Wed, 08 Jul 2009 07:47:00 -0700

A pair of New Jersey lawmakers are hopping mad about the costly, dubiously competent Tropicana Atlantic City trusteeship of Justice Gary Stein. The solons are particularly het up over the way Stein was feathering his own nest.

"It is unacceptable, but not surprising, that this transaction would drag on for almost two years, yielding a cut-rate price for the sale and ballooning legal fees for the law firm of the state-appointed conservator," fumed Assemblyman Vince Polistina (R). He and colleague John Amodeo (R) will seek to impose new ethics rules and fee ceilings on future casino conservators. Good on them.

Divergent responses from within the New Jersey Casino Control Commission make interesting reading. The NJCCC's spokesman circles the wagons around Stein while Chairwoman Linda Kassekert -- clearly hip to which way the wind is blowing -- lines up with Amodeo and Polistina. She put Stein in the catbird seat but clearly has scant compunction about cutting him loose now that he's a millstone around her neck.

Tropic(ana) of Confusion

Thu, 02 Jul 2009 15:22:00 -0700

News reports are at sixes and sevens of just how much of the Tropicana Las Vegas is now owned by Onex Corp. For instance, Bloomberg states that Onex's stake represents 60% of the $440 million owed on the property (or would that be 60% of a theoretical $733 million/$21.5 million per acre?), while the Calgary Herald confusingly spreads Onex's $440 million -- or would that be $264 million? -- commitment between the Vegas and non-Vegas holdings of Tropicana Entertainment.

The Herald, in an obvious boo-boo, mis-reports that TropEnt was split into Atlantic City and non-A.C. halves. Seriously, once the new LV Trop administration starts taking reporters' calls, could somebody straighten out if Onex's commitment is $440 million, six-tenths of that or some more-confusing permutation altogether? The dueling numbers are starting to make my head spin.

The Calgary paper, though, discover the interesting wrinkle that TropEnt CEO Scott Butera is trying to make off with the Vegas Trop name and lease it back to Onex at $10 million a year. Clever, yes. And, if the courts allow it, Butera's got Onex over a barrel because relaunching old properties with new names has been a losing proposition in Las Vegas. Bereft of its name, the Trop could easily become a big-ass Hooters Hotel.

Amidst this turmoil, Alex Yemenidjian has taken the reins at the Trop with an emphasis on customer service. (Interestingly, if you read the non-R-J coverage, Onex has partly reneged on its capex commitments, rolling back a $100 million reinvestment to $75 million.) The proposed South Beach retheming will have to be done in stages but, hey, that's the way they used to do it.

One need only look at the corpse of the Lady Luck or the gravesite of the Stardust to see the perils of a do-it-all-at-once makeover. And it beats the heck out of Butera's 2014-2016 timeline for even beginning work. While Butera may have been an improvement on Columbia Sussex CEO William J. Yung III, his diffident attitude toward the LV Trop will probably leave few regretting his departure.

Don't do it, Alex!

Thu, 25 Jun 2009 18:29:00 -0700

Noooooooo!

That was my reaction upon reading the Mike Weatherford shocker that the Tropicana Las Vegas may be putting many of its future entertainment eggs in the basket of Anthony Cools. The latter produced an ultra-craptacular topless show, Ooh La La at Paris Las Vegas.

Shoehorned into a large, low-ceilinged banquet room, Ooh La La had terrible sightlines (kind of a problem for a T&A show), pushy ushers and charmless performers. Were it not for Raw Talent Live, it would have been the worst show I've ever seen in Las Vegas. Cools has been threatening to bring it back ... please, Alex Yemenidjian, stop him before he "presents" again.

Our long civic nightmare continues. Five more years! Five more years! Yes, Luxor has extended Carrot Top to 2015. Mr. Top accepted the honor in typical family-friendly style.

While I'm under the knife at the dentist next Tuesday, Lance Burton will be fielding questions at Monte Carlo. The venue alone makes the nature of the announcement self-evident. Three cheers to MGM Mirage for pulling back from the brink and not evicting Burton at a time when he's been getting some of the best reviews of his career. There was nothing like the fumbling Criss F. Angel to make people appreciate just how much better Burton seems to be.

Reading Room axed. You know those three cheers for MGM? Make them three Bronx cheers. "Literature? Pah! We no like! Make way for shiny trinkets!"

Why launder money in Las Vegas or Macao when there's ... the Dominican Republic?

Peepshow 2.0 tonight. The pain of yesterday's dental procedure is likely to be but a gentle zephyr compared to the near-certain ordeal that lies ahead. For reasons too convoluted to explain, my review won't appear in CityLife until July 9. With luck, the show won't have closed by then.

Case Bets: California, Packer pickle, Macao pix, Holy Cow!, Singapore, RoboPoker, etc.

Thu, 25 Jun 2009 16:24:00 -0700

Editor's note: An item involving Crown Ltd. contained factual errors, which have been corrected (as you'll see). I apologize for the misinformation. My thanks to the reader who pulled my head out of my @$$.

California gamblers stay and play ... at home. While the recession has made some inroads on tribal-casino revenue in the Golden State, it's losing less ground than Las Vegas. Some of those Vegas losses will eventually be recouped, but this day of reckoning was bound to come.

Unlike Las Vegas, which is arguably suffering from having too many competing profit centers within each resort, California casino bosses interviewed still view entertainment as either a loss leader or a one-off. I never thought I'd say this but Las Vegas could use a little more "old school" thinking right now.

James Packer, the guy who can't catch a break, is finds his casino company in even more hot water, in a case of the sins of the father being visited upon the son. The plot surrounding Crown Ltd.'s courtship of a self-banned high roller (and convicted felon) is thickening considerably. Seems paterfamilias Kerry Packer may have been pressuring crony John Williams to get pathological gambler Harry Kakavas back to the tables.

Williams, for his part, rolled on the late Mr. Packer, ~~who's now got some 'splainin' to do~~. ~~No wonder the young Packer's pursuit of Cannery Casino Resorts collapsed like a pup tent.~~ The money quote, if you will, is: "[Williams] said it was common for patrons to rip up [self-exclusion] cards and that, in his view, Mr Kakavas's loss of $2.3 million in 28 minutes was recreational gambling."

If you lose $82,000 per minute, it's not recreation. It's degenerate gambling.

Globe-trotting Ian Sutton is back from Macao and G2E Asia. The sights! The sounds! The smog!

(Update: Ian says it's not smog but mist, as forthcoming videos will show.)

Holy Cow II: GlobeSt.com, normally a continent source of business news, is shocked -- shocked! -- that Steve Johnson's proposed casino on the former Holy Cow site will include a Walgreens. Smelling salts, stat!

But there are some interesting revelations, For one, the reason that Palazzo's flagship retailer is also a Walgreens is that it was a compromise Sheldon Adelson effected with the landowner ... Steve Johnson. (The mere fact of Adelson compromising is newsworthy enough.)

Turns out, that purchase may set the record for an on-Strip acquisition, at an alleged $50 million per acre -- Phil Ruffin, eat your heart out! Johnson also paid through the nose for the Holy Cow site. The price? $23.5 million/acre for land north of Sahara Avenue. Egad!

Columbia Sussex's casino portfolio continues to crumble. Tropicana Entertainment parent Tropicana Casinos & Resorts is selling its Amelia Belle riverboat (thereby forfeiting the New Orleans market) barely two years after the ship was acquired. Amelia Belle is former Harrah's Entertainment vessel, having been Bally's Belle of Orleans.

It's a canny strategic move for new owner Peninsula Gaming, which now has a Louisiana riverboat as well as a racino and four OTBs, not to mention a small flotilla of Midwest riverboats. TropEnt CEO Scott Butera, meanwhile, has less and less over which to preside. At the moment, his ambit consists of four riverboats, mostly in tertiary markets, two casinos in Laughlin and one on Lake Tahoe. Is this TropEnt's future: A succession of piecemeal asset sales? Sure looks that way.

Bad news for Sheldon Adelson. Over in Singapore, rival Genting's mega-budget Resorts World at Sentosa is letting news outlets like Bloomberg know that 60% of the project will ready for a soft opening in early 2010 (i.e., February-March). Projected attendance figures have been revised 20% downward.

In a rapier thrust at Marina Bay Sands, a Genting exec said the company was having regular meetings to make sure it came in on its $4.5 billion budget. Full completion of Sentosa is projected for 2012. Sands is going to have a sufficiently tough time making its nut without Genting crashing the party so soon ... to say nothing of the fact that Genting enjoys much higher brand equity in that corner of the world.

RoboPoker has risen from the grave. Electronic table games have been OK'd for eight New York State racinos. Though the Lege hasn't signed off, the Empire State's lottery board is confident it has the authority to make this move unilaterally. Poor Atlantic City is dying the death of a thousand cuts.

Congratulations to Penn National. It's scheduled to inaugurate a new pavilion for Empress Joliet today. A March 20 fire resulted in a three-month closure of the boat and substantial fiscal hardship for Penn National. In a noble gesture, CEO Peter Carlino kept employees on the payroll even though his ship was hors de combat. Capt. Carlino, S&G salutes you.

Harrah's Azov?

Thu, 18 Jun 2009 16:23:00 -0700

Bloomberg News reports the following: Harrah's Entertainment, the world's biggest casino company, may build a resort on the Azov Sea, Vedomosti reported Tuesday.

Harrah's may join U.S. construction company Asati in building a complex in Azov-City, one of four gambling zones planned in the country, Vedomosti said, citing Asati founder Alex Kogan.

The resort, which will include a casino, hotels and conference centers, will cost between $50 million and $100 million, Kogan said.

Wow! Try building a U.S. resort -- or even a Macanese one -- for so little money. I've asked Harrah's for confirmation but have yet to hear back. Although several overseas ventures have gone belly-up, the company continues to persist.

However ... despite the Russian government's decree that all casinos be moved to special zones, scattered around the far reaches of the empire, little headway has been made: "One Russian publication sent a reporter to check out progress on one of the zones, who discovered open fields filled with grazing cows." The Azov-City project, for one, has a long way to go.

And how is ~~Harrah's/~~Asati going to build a casino for $100 million or less? One word: tents. "Several foreign investors have begun preparatory work, including the Austrian company Asati. The company plans to build on the 20 hectares of inflatable structures, area of 100 thousand square meters," explains one investment site, "... the inflatable structure can be a casino and a water park and the congress hall. In addition to inflatable structures Asati company intends to build a 17-storey hotel and 34 bungalows."

If there's to be gambling under a big top, I'd suggest they call the place Circus Circus, but Jay Sarno got there first. Potential feeder markets for "Harrahs' Azov" would include Kiev and Odessa, but the closest major city appears to be Stalingrad ... er, Volgograd.

Yung & the restless: Closer to home, in Kentucky, the grand vizier of Columbia Sussex, CEO William J. Yung III, is loaning out the corporate locomotive for charitable causes. Company locomotive? No, we're not making this up.

Restiveness marks the labor situation at one of the distant outposts of Yung's hotel empire. Both in the slow pace of negotiations and the demand for employee give-backs, it's very reminiscent of the scrumdown that was the Culinary Union/ColSux stalemate of two years back. At least Scott Butera intervened to make peace before it reached the point of a Tropicana Las Vegas boycott.

Small beer? Just what Resorts International in Atlantic City needs ... more regulatory problems. C'mon, guys. We hook up beer kegs all the time here at LVA. It's not rocket science. Then again, it's difficult to "misunderestimate" Colony Capital.

Reid rewarded, Trop rescued

Wed, 03 Jun 2009 15:47:00 -0700

... Sen. Harry Reid's (D-NV) efforts on behalf of the casino industry have not gone unrewarded. If you can follow this formatting garble, you'll see that his donors include not only Tim & Tom, late of the Golden Nugget, but also several reliably Republican casino CEOs.

Even the Fertitta Brothers have chipped in, which is the least they could do after the Senate Majority Leader shepherded a provision that incentivizes companies to buy back distressed debt ... which Station Casinos has in abundance. All of which means that Sharron Angle and any other GOP challenger will have to build up a war chest from other industries. The coffers of Big Gaming -- with possible exception of Sheldon Adelson's kitty -- are slamming shut. The industry has taken sides and put its money on Reid.

Yemenidjian is in the house. Pending the stamp of approval for the Nevada Gaming Commission, all systems are "go" for Alex Yemenidjian to take the reins of the Tropicana Las Vegas. The feeling at the Trop must be akin to that of a besieged garrison finally seeing a relief column marching its way.

The former MGM Grand boss is saying all the right things. His backer, Onex Corp., will invest $100 million (or more) in the property, which has suffered manifest neglect. Current operator Tropicana Entertainment's capex budget was fairly puny, symbolic of CEO Scott Butera's halfhearted commitment to the LV Trop.

Under Yemenidjian, the casino will be extended to encompass the ends of the two pedestrian bridges. Two new eateries and a nightclub are planned. No word yet about a new evening show (or about chasing the prostitutes, pimps and -- worst of all -- timeshare peddlers from the premises). But Yemenidjian has too much reputation at stake to simply continue the stagnation that has been the Trop's status quo for more years than I care to remember.

(Correction: Yemenidjian plans to lower the bridge, not raise the river. Which is to say that the pedestrian bridges will be extended to reach the casino, not the other way around.)

When Yemenidjian was (unsuccessfully) pitching an Illinois casino -- also backed by Onex -- his prospective management team included two Gulf Coast veterans: Joe Billhimer and Karen Sock, late of Hard Rock Biloxi and Harrah's Grand Biloxi, respectively. Both are heavy hitters and Sock, in particular, is overdue for a Vegas posting. Here's hoping Yemenidjian brings them here. Better late than never ... and the Trop needs some serious brainpower.

"We really mean it this time." Another day, another "Las Vegas Sands has the capital to restart the Cotai Strip™" story. Turns out it's the same old same-old. The prospect of asset sales, if not dead, isn't looking terribly hale. After all, who wants to buy a hotel in Macao if you must forefeit the casino action? Where's the fun in that (to say nothing of the money)?

Margaritaville wastes away

Tue, 02 Jun 2009 12:20:00 -0700

In an utterly (not) shocking development, the interminably protracted sale of Trump Marina has given up the ghost. This deal was on life support for months, so today's bulletin merely ratifies the inevitable. The would-be reinvention of the Marina as "Margaritaville" has exhausted its last shaker of salt.

While it goes against the grain to give Donald Trump the benefit of the doubt, buyer Richard Fields' accusation of "fraudulent activity" sounds like a big stretch. The supposedly heinous deed was Trump Entertainment Resorts' movement of players from the Marina to Trump Taj Mahal and Trump Plaza.

Big whoop. Not only was this the obvious explanation for Trump Marina's plunge to the bottom of the Atlantic City food chain, it's what casino companies do. You don't sell a casino and leave your hard-earned customer base in place for the next guy's benefit. (Readers with long memories will recall that a deal by Park Place Entertainment to sell the Las Vegas Hilton to Silverton owner Ed Roski fell apart over the exact same issue.)

Had Trump CEO Mark Juliano not moved prime players to his two remaining properties, he'd have been derelict in his duty to the shareholders. Unfortunately, now he may have to build that customer base back up. I don't envy him the task.

It also strikes an odd note that Fields' lawyer accuses Trump of fraud and then Fields' spokesman has the brass to say Coastal Marina still might deign to buy the Marina -- at an additional discount. Juliano had already knocked 15% off the sticker price. Perhaps Fields is feeling emboldened by Carl Icahn's impending $200 million acquisition of the Tropicana Atlantic City and is attempting brinksmanship. Fields is making some big noises about shopping around Atlantic City for a different casino, describing the town as "the perfect market for a Margaritaville project."

Good luck with that, unless he's willing to settle for one of Colony C(r)apital's two near-death properties. Harrah's Entertainment is carrying at least one casino too many on the Boardwalk but there's no way in hell that CEO Gary Loveman parts with Bally's or the Showboat for a measly $270 million or so. Harrah's current reporting method really muddies the waters but the cash-flow numbers still imply an asking price well in excess of what Fields can afford.

Raymond Kot, 1952-2009

The accused killer of Trump Taj shift manager Raymond Kot is one messed-up motherfucker, and that's as gently as I can describe Mark Magee, who appears to have stalked and killed Kot in very cold blood indeed. Taj game-protection veteran Dr. David G. Schwartz offers some expert-witness testimony, if you will. Kot's only crime was to achieve the American Dream ... until his assassin decreed otherwise.

The MGM/Pansy Ho verdict: It's in and it's bad

Tue, 19 May 2009 11:15:00 -0700

After nearly four years of investigation, the New Jersey Division of Gaming Enforcement has released its long-awaited "suitability" findings on MGM Mirage joint-venture partner Pansy Ho. As MGM itself reported to the SEC yesterday, "While the report itself is confidential, at the conclusion of the report, the DGE recommended, among other things, that: (i) the Company’s Macau joint venture partner be found to be unsuitable; (ii) the Company be directed to disengage itself from any business association with its Macau joint venture partner; (iii) the Company’s due diligence/compliance efforts be found to be deficient; and (iv) the New Jersey Commission hold a hearing to address the report."

The grinning ghost of MGM Grand Macau

While the reason for the DGE's disapproval isn't given, it's also not difficult to guess. When someone with the sleazy reputation of Stanley Ho has an interest in your casino -- by dint of loans to two of his daughters -- a jurisdiction that takes probity as seriously as New Jersey is unlikely to give its benediction.

Slightly further down in its SEC bulletin, MGM offers one of the most Pollyanna-ish statements of recent memory: "The Company does not believe that the report will have a material adverse effect on it."

Let's back up a second. The matter of Ms. Ho now goes to the New Jersey Casino Control Commission for adjudication. The NJCCC is not obligated to act on the DGE's findings. However, the last time it exercised such discretion, it was to override the DGE's recommended probation for Columbia Sussex in favor of kicking ColSux out of the Garden State forthwith.

So the likelihood is that MGM will be faced with a choice between liquidating its New Jersey holdings or its Macao ones. The latter include a 50% stake in Borgata (and Boyd Gaming can afford to buy its partner out), plus some undeveloped land, which will be a much tougher sell.

As for MGM Grand Macau, it would revert to the Ho family. MGM could still, in all probability, count on an ongoing stream of revenue by leasing out the brand name or even by negotiating a management contract for itself (although management is rumored to have been the casino's Achilles heel).

Unless the NJCCC grants clemency (in which case, MGM loses face but nothing more, as one analyst puts it), "material adverse effect" is inevitable. But there may be a silver lining for CEO Jim Murren. He was able to get debt-covenant violations waived in return for an accelerated repayment of the company's whopping debt load. The diñero from a Borgata or MGM Grand Macau sale would come in mighty handy as the company tries to de-leverage itself.

Walking (out) in Memphis. A 21-year veteran of the Harrah's Entertainment hierarchy resigned last week, another casualty of the company's downsizing.

And then there were 135. It used to be the execs jumping from the sinking Cosmopolitan ship reached for a lifeline from Fontainebleau. Now they'll be looking for another rescue vessel. (Hey, the Tropicana may be hiring soon.) A F'bleau spokesman says negotiations with Deutsche Bank are continuing, in a notable ratcheting-down of the bellicose rhetoric that's been lobbed to and from F'bleau of late.

Heard last night as part of an act at Sin City Comedy, re the Vegas Trop: "A $20 bill and all my teeth -- I'm a whale!" Conclusion: Alex Yemenidjian cannot arrive soon enough.

Perp Show

Thu, 14 May 2009 12:38:00 -0700

If you're bald, weight 285 lbs. and have one arm in a cast, you're not exactly inconspicuous. So how was it that that such a hefty man was to infiltrate a VIP area of Planet Hollywood and bust into Peepshow headliner Kelly Monaco's suite? It gets weirder: Merrill Wetter was a long-term denizen of Planet Ho and had been 86'd last month for following a money cart around. And yet his reappearance on the 50th floor didn't raise any alarms, literally or otherwise. This new information suggests a serious lapse of security at Planet Ho, something that the Nevada Gaming Control Board might want to investigate.

April in Atlantic City. The numbers are out and they suck. Again. Unless you're Borgata, which was basically flat with April '08 -- a veritable triumph in this context. The Showboat didn't do too badly (-7%), pushing ahead of the larger Tropicana Atlantic City (-21%). However, another Harrah's Entertainment property, Bally's Atlantic City is way off last year's pace (-19% YTD) and risks joining the Dead Man Walking quartet of Trump Marina, Trump Plaza, the Hilton and Resorts.

The partial reinvention of Trump Taj Mahal continues to pay off, with gaming win down less than 1% through the first four months of the year. Don't you wish we had this kind of reporting transparency in Nevada?

Reid's smooth ride: Would-be GOP challengers to Sen. Harry Reid (D-NV) are not only thin on the ground they're probably hearing casino-industry check books slam shut after the Senate Majority Leader jawboned banks on behalf of CityCenter and Fontainebleau. (It was a futile effort but, at this particular moment, that says more about the lending-averse banking industry than Reid.)

Party leaders say a "highly motivated" "strong GOP challenger" is out there and will emerge ... in five months or so. The only person shaking the money tree so far is former state legislator Sharron Angle. She'd rough Reid up, to be sure, but has an Achilles heel or two. To date she's been a single-plank candidate -- property taxes; not what you'd call a senatorial issue. Also, state GOP chairwoman Sue Lowden doesn't want a divisive primary ... and Angle was very divisive when she ran against Dean Heller (R-NV) three years ago for the congressional seat Heller now holds. She even tried to have the primary results overturned in court. But for now she's the only game in town.

Double duty: For the unforeseen future, I'll be spelling the estimable Dave Surratt as CityLife's theatre critic. First up is a show directed by Zumanity emcee Christopher Kenney. Called The Facts of Life: The Lost Episode it's ... it's ... well, it's different.

Case Bets: Caesars, Criss Angel, Lance Burton, Earl & Lani and Trent

Wed, 13 May 2009 14:44:00 -0700

Seen last night by an S&G source, Pit One at Caesars Palace empty save for one or two baccarat players. It's just a small indicator of a larger disconnect that I hope to address later.

PR flack Robin Leach has been transcribing more of the gospel according to Criss Angel, the latest being that Cirque du Soleil's wunderkind "will juggle his schedule" of Believe dates to make room for filming the next season of Mindfreak. Do you think this might be a face-saving way to cut back on performances of a show that's already having to be deeply and frequently discounted? Naaaaaaaaaaaaah!

And is MGM Mirage really content to let Lance Burton walk, as appears to be the case? With only a month remaining on Burton's contract, no extension has been signed and MGM punted our query to Burton's manager.

Two of the Strip's major showrooms are currently vacant. Burton's act is probably too downmarket for Wynn Resorts' tastes (or pretensions, if you prefer) but Alex Yemenidjian could steal a march on his former employer by bringing Burton back to the Tropicana. Lord knows, the place could use him and Dirk Arthur is working on a short-term contract now -- a stopgap arrangement made when interim Trop management screwed up and came within days of having no shows at their property.

Value for the $$. Last week's adventures included checking out Voices at the Las Vegas Hilton, which gives the LVH a long-needed shot in the arm. Stars Earl Turner and "the beautiful Lani Misalucha" (as she is always introduced) wisely minimized expectations prior to opening. For one thing, their energetic, caution-to-the-winds revue features far more interaction than they led people to expect. Who knew if these two very different singers would "jell" ... but they do.

It's a rouser and -- at an $80 top -- a considerably better value than Elvolution, starring Trent Carlini. Eighty bucks at Voices gets you two headliners and a six-piece band. A $92 top at Elvolution buys you an Elvis Presley impersonator ... singing to backing tracks. That takes some nerve, I tell ya.

You know it's a bad day ...

Mon, 11 May 2009 11:53:00 -0700

... when the company riding to your rescue is Columbia Sussex. Had Tropicana Entertainment not farmed out operation of the Horizon in Lake Tahoe to its William J. Yung III's company, it might have been closed outright. As matters stand, Horizon owner Edgewood Cos. is mulling tearing the place down and redeveloping the site. The Trop Ent-out/Col Sux-in arrangement appears to have been a compromise brokered to keep the Horizon open for at least another three years in return for an extension of TropEnt's MontBleu lease (due to expire in 2018).

But make no mistake: The Horizon is now entering the casino version of hospice care. TropEnt's swift decimation of the Horizon, to render it as noncompetitive with MontBleu as possible, has already cost it one unlikely set of customers -- the South Tahoe High School prom, slated for D-Day.

A prom in a casino? If you need a ballroom, it makes a world of sense, even if it does sound like the setup for a creakier-than-usual Facts of Life episode in which everybody learns A Valuable Lesson about the perils of gambling, or something comparably homiletic.

Trouble waiting to happen?

Fri, 08 May 2009 17:51:00 -0700

Not to belittle acts of violence that occur in or near casinos, but we don't make a practice of reporting them in LVA. That's partly because people seem to need little excuse to kill one another and would just as soon bust a cap in your ass at Camp Snoopy as in a casino.

However, a deadly early-morning stabbing on the grounds of the Tropicana Las Vegas may warrant closer scrutiny, due to that hotel-casino's recent history. During a contretemps with then-owner Columbia Sussex, the Culinary Union drew attention to an influx of unsavory characters during the pre-dawn hours. (An extensive printed report accompanied and considerably enlarged upon the video evidence.)

At the time, the Nevada Gaming Control Board was probing allegations of security understaffing. With interim owner Tropicana Entertainment still trimming expenses and new manager Onex Corp. not yet in place, has the ball been dropped again? Perhaps the NGCB should take another look, just to be safe.

Atlantic City Death Watch VII

Thu, 07 May 2009 14:29:00 -0700

Speaking at the Southern Gaming Summit, former Harrah's Entertainment COO and current Penn National Gaming President Timothy Wilmott pronounced the last rites for Atlantic City. "That market is in a death spiral. The next two to three years are going to be awful," he said. Wilmott's grave prognosis contains a hidden twist of the knife at his former employer, whom he left abruptly at the start of '07. (Harrah's has four casinos in Atlantic City.)

It's more than rhetorical posturing, too, as Penn has passed on several opportunities to get into that market. Judging from Penn's most recent earnings call, the company's turned the page on its erstwhile desire for a piece of the seaside action.

Isle of Capri Casinos CFO Virginia McDowell, a member of one of several executive teams than have been hustled into and out of Trump Entertainment Resorts in recent years, added that a lack of non-gambling attractions has been Atlantic City's downfall.

We beg to differ ... at least to the extent of noting that Vanessa Williams is playing the Tropicana Atlantic City this weekend. Can't think of a better reason to visit the Boardwalk than that.

Bleak Horizon

Tue, 05 May 2009 16:48:00 -0700

Anybody who thought Columbia Sussex CEO William J. Yung III was exiting the casino industry, let alone going quietly, got a bracing dose of reality today. The older of Tropicana Entertainment's two leases in Lake Tahoe, the Horizon, is in wind-down mode. It has two years to go on its lease (although it could theoretically operate into 2014) but TropEnt CEO Scott Butera is wasting no time rolling up the sidewalks.

Rather than be bothered with the continued management of the Horizon, Butera is fobbing it off on Lake Tahoe Realty I, a creature of Columbia Sussex. The transfer kicks off in true Yungian fashion with the elimination of 75 jobs. As bad or worse from the customer's standpoint, the table games operation at the Horizon is being axed altogether and the 719-slot inventory will be decimated by two-thirds or more. While all of this is straight from the Bill Yung playbook, there's no indication so far that it's anyone's fault but that of Butera. As he prepares to consolidate Tahoe operations around MontBleu (the former Caesars Tahoe), he'd clearly like to see as little as competition from the Horizon as possible. Hence its demotion to grind-joint status.

How this ledger-demain plays with landlord Park Cattle (aka Edgewood Cos.) will be interesting to see. Yung's stewardship of the Horizon (which, according to recent litigation, could be characterized as malign neglect) was a source of great vexation to Park Cattle. One can only wonder how Edgewood execs feel about being back in business with Bill Yung. If the Horizon's recent history -- not to mention its savage downsizing to 200 gaming positions -- is any guide, Park Cattle's stated goal of converting it into a non-casino hotel is going to happen sooner rather than later, options notwithstanding.

Harrah's takes out the garbage; Yemenidjian's return

Tue, 05 May 2009 14:53:00 -0700

Congratulations -- I think -- to new Harrah's Entertainment General Counsel Timothy R. Donovan. A graduate of The Ohio State University, Mr. Donovan comes to Harrah's by way of the garbage industry. Considering that picking up the trash around Harrah's properties has sunk to a very low order of priority, maybe he can put CEO Gary Loveman in touch with an affordable waste-disposal provider. In any event, bringing a veteran of the garbage-removal business into a trashed company is priceless in its symbolism.

The man who wouldn't leave. In case you hadn't heard, not only is the bankruptcy auction for the long-suffering Tropicana Atlantic City expected to drag into the summer, that won't be the end of Gary Stein's dilly-dallying trusteeship. No, not by a long chalk! After all, the new buyer will have to be vetted by the New Jersey Casino Control Commission, which means that Stein's sinecure will become a two-year gig, extending into December ... at least.

In the meantime, the splitting of Tropicana Entertainment into components that can be termed "Las Vegas" and "Everything Else" continues apace. It's being underwritten by $150 million from Carl Icahn. But there are limits to Icahn's generosity, as his loan comes attached with a 15% interest rate.

Remember how S&G predicted that transfer of management of the Tropicana Las Vegas to former MGM Grand boss Alex Yemenidjian looked like the start of a sale. Sho' nuff! Yemenidjian's backers, Canadian Onex Corp. will control the majority of the board. The LV Trop has been a manifestly low priority for TropEnt CEO Scott Butera, who been's primarily fixated on Atlantic City (and secondarily on Indiana). A shift of directorship to a company whose first and only priority will be Las Vegas is to be welcomed.

Chump change for Trop

Wed, 29 Apr 2009 17:00:00 -0700

While there has been no shortage of bad decisions in the casino industry of late, the Dunce of the Year winner for 2008 and presumptive favorite for 2009 has got to be Tropicana Atlantic City conservator Gary Stein. This former member of the bench managed to turn what was intended to be a brief transitional process into a munificent 16-month sinecure ... which could stretch to 18 months or longer, depending on how soon the bankruptcy court acts. Not only was Stein's interminable tenure an unconscionable waste of money, if he made one good decision during that time, S&G must have nodded off for five seconds and missed it.

You will recall that, last spring, Stein scoffed that an $850 million bid by Colony Capital and an undisclosed one from Cordish Co. were "unreasonably low." What's more, he said the market for a distressed, mismanaged Atlantic City casino could only get better. (One of Stein's several miscalculations was to use the still-in-abeyance Trump Marina sale as an economic barometer.)

Reality was close behind with a swift kick in the ass, as the best Stein could manage was $545 million in cash (plus another $150 million or so in securities) from Cordish. And, as Stein's tortoise-powered negotiations crept onward, Cordish wanted to haggle the price down even further and eventually there was no deal to be had.

Which means that a casino that might have fetched over $800 million 11 months ago will now go on auction for a quarter of that amount, after a process that the Press of Atlantic City eventually characterized as "exceedingly slow." Worse still, since Icahn would gain the Trop via a credit bid, New Jersey won't have any sale proceeds to show for its year and a half of trouble. Since a parallel bankruptcy proceeding hasn't yet expunged Tropicana Entertainment owner William J. Yung III's equity stake, there's no way in hell the NJCCC would hand the Trop's keys to TropEnt CEO Scott Butera, no matter how pure his intentions.

Stein put the best spin he could on this fiasco, stating that "although like the entire industry our revenue and profits have been effected [sic] by the difficult economy, our financial position is solid and the only reason we are filing petition today is to be able to sell the casino assets free and clear of all liens." Somehow NBC40 was able to keep a straight face while reporting that the NJCCC believes "this 'stalking horse bid', will help them achieve the highest price possible in light of the current economic conditions facing the gaming industry."

True, starting the bidding at a rock-bottom $200 million might entice Cordish or someone else to pony up real money. But whatever the Trop eventually fetches is all but certain to be a shadow of what it could once have brought, had Stein performed his duty with alacrity. (And no potential bidder's position is nearly so advantageous as Icahn's.) It took an April 15 public yanking of Stein's leash by his NJCCC overseers just to get this much accomplished, threatening to send the Trop to bankruptcy court with no stalking horse bid.

While Stein strove for a victorious posture, The Associated Press cut through the crap. Its headline? "NJ OKs cut-price auction for Atlantic City casino." Reporter Wayne Parry even got Stein to concede there was no guarantee that $200 million wouldn't be the final price. If that's the ignominous conclusion to this saga, it may someday be known in the industry as "Bill Yung's Revenge."

What a screw-up.

Case Bets: Isle exits U.K.; no room at the Trop; Carlino channels Astaire, etc.

Fri, 24 Apr 2009 17:22:00 -0700

Isle of Capri Casinos is coming up for air, literally extricating itself from underneath Ricoh Stadium in Coventry, U.K. As part of CEO James Perry's attempt to refocus a company that spread itself too thin under his predecessor, he's walking away from an ill-starred British venture. Rank Group not only assumes Isle's lease, it gets the casino itself for pocket change, by industry standards: $940,000.

Perry may also be preparing to unload Isle's Pompano Park racino in the disappointing Florida market. At least one analyst is now picking Isle, so recently stuck in the mud, as one of the better bets to emerge intact from the gaming group's crisis.

A house divided cannot flush. Staggering from miscalculation to mishap, the Tropicana Las Vegas has sustained another self-inflicted wound. But don't blame current steward Tropicana Entertainment, predecessor Columbia Sussex or even Aztar Corp. The non-kosher plumbing that got the Paradise Tower shut down dates back to the 1990s, when the Trop was under divided ownership (one of the many obstacles to its redevelopment). The scary part is that it took at least 10 years for the code violations to be discovered.

The real victims, of course, are the hotel guests who are getting bumped from their Paradise Tower rooms. Since it's far and away the nicest part of the Trop, by definition they'll be moving to less-desirable rooms, some of them in truly decrepit parts of the hotel. Given the condition of the Trop's physical plant when I made a "secret shopper" visit, today's news comes as less than a surprise. The resort's advancing years were bound to catch it out sooner rather than later.

Penn's fancy footwork. While not out-and-out denying an attention-getting New York Post story about a possible 'credit bid' play for The Mirage, executives of Penn National Gaming were at some considerable pains to imply that it was all smoke, no fire. CFO William Clifford put it thusly: "... there were quotes and things said that have been pulled all the back to the last year’s Gaming Conference ... I’m not quite sure that the Post article is a very good reflection of anything we’ve ever said at any point in time."

CEO Peter Carlino followed with, "Some of the most interesting quotes were made at a time when none of the stuff that you are all currently thinking about was out there so it’s unfortunate. It’s just a hodgepodge of things pulled together to make a story. We would have preferred not to have seen it that way. Look, common sense says if there’s an opportunity we’re going to follow it but it’s no more exciting than that; enough said." [Emphasis added]

A Bloomberg News report that Penn was pursuing Greektown Casino went unaddressed in yesterday's earnings call. To the extent that Carlino was willing to commit himself on Las Vegas, he said Penn wanted no more than a single property "if we can find one." The consensus of Penn execs was that Vegas would be a "viable" market for the company ... in five years. (The company's strategy is partially predicated on an exodus of Californians relocating to Vegas and jump-starting the local economy.)

Sadly, Atlantic City seems to have slipped off Penn's radar screen altogether. On a happier note, the company promises a new and "exciting" replacement for the Empress Joliet pavilion that was destroyed by fire -- which makes it sound like the previous Ye Olde Egypt theme is now history, so to speak.

Schreckliche Idee! At a time when institutions like Goldman Sachs and Deutsche Bank control ever-larger chunks of the Strip, the Nevada Gaming Commission is seriously considering lowering the threshold of scrutiny even further. (Because if there are any two words that instill confidence nowadays, those words are "Wall Street.")

The man fronting this idea, veteran gaming attorney Frank Schreck, argues that his proposed rule change wouldn't result in casinos ceding managerial or operational control. However, that's already happened at the Las Vegas Hilton, where a Goldman-owned stalking horse holds a sizeable minority interest. What he's proposing would take a bad precedent and codify it.

By linguistic coincidence, schreck is the German word for "fright" and the root of schrecklich or "horrible." Which is what this idea is. But Nevada regulators are already overburdened and about to become more so, once the next budget is enacted. Given that grim future, Schreck's proposed lightening of their workload will be probably be embraced.

Carlino's Way: a brilliant Mirage gambit

Wed, 22 Apr 2009 13:14:00 -0700

Considering that Penn National CEO Peter Carlino would have paid far less for Treasure Island than the $775 million (bargain) price that Phil Ruffin ponied up, it's been looking like Hell might be hosting the Ice Capades before Carlino could secure a trophy property on the Strip at a dollar figure he deems affordable. Factor in the reported reluctance of both MGM Mirage and Harrah's Entertainment to part with Strip properties for less than 10X cash flow -- and maybe not even that -- and you figure Carlino and a first- or even second-tier Strip property are going to intersect sometime around the Twelfth of Never.

Carlino's criteria for buying into the Strip, as set forth in a March epistle, are exceptionally conditional: “We’re watching things very closely but will pounce only when the sun, moon and stars align. Penn National can wait as long as need be to make acquisitions that will be opportunistic and, more importantly, return-focused.” Run this month-old e-mail through the Wishful Thinking Machine at the Las Vegas Review-Journal and you get a headline like, "Penn National ready to 'pounce'."

But soft ... what light through yonder tabloid breaks? 'Tis the east and Peter Carlino is the sun. Arise, fair Carlino and buy The Mirage! Although Kirk Kerkorian, MGM Mirage and Penn National are doing their best impersonation of signifying monkeys, Post reporter Josh Kosman is onto a story that, if it pans out, will leave Strip observers gobsmacked. It would appear that Carlino has indeed found a means for bringing sun, moon and stars into alignment that gets a '10' for creativity.

In essence, banks holding some of the $7 billion in unsecured debt that comes due two years hence would make a 'credit bid' on The Mirage, trading debt for property. In turn, they'd hold it as collateral against an eventual repayment by Penn National, which would cross MGM's palm with a downpayment of unspecified size -- but probably small enough that Carlino could crow, "Victory is mine!"

(Interestingly, Penn is also reported by Bloomberg News to be sniffing around for a Detroit casino. It's not MGM Grand Detroit -- which may go wanting for prospective buyers, according to Kosman -- but bankrupt, red ink-ridden Greektown Casino. Given the hard bargains Carlino likes to drive, somebody's going to end up eating Michigan-sized debt if that deal should go through. No way Penn takes on the $777 million Greektown owes.)

It's a variant of an earlier ploy, rejected by MGM CEO James Murren, in which Boyd would have relieved MGM of some of its bonds in exchange for a Strip casino. “[Murren] fixated on the multiple we’d pay. I suspect that attitude may have some flexibility now," gloats Penn CFO William Clifford. Carlino says that Vegas holds "a dozen" casino-hotels that would fit the mid-market niche of Penn's customer base. He's openly ruled out Tropicana Las Vegas, so if a Mirage deal evaporates, what remaining resorts might comprise Carlino's Eleven?

Pinnacle: the untold story

Tue, 21 Apr 2009 11:51:00 -0700

Is waxing and buffing the Pinnacle Entertainment limo a prerequisite for scoring an interview with its CEO? This small masterpiece of selective omission is more interesting for what it elides than what it says. The article parrots Dan Lee as saying Pinnacle believes "not to start building something without the money to finish."

That's an excellent precept but it would resound with greater authority had Pinnacle not gotten bogged down in Atlantic City by failing to practice what it preaches. It bought Carl Icahn's old Sands, razed it, cleared the land ... then found it couldn't raise the capital to build the megaresort Lee had envisioned. By that point, Pinnacle had exercised such a heavy hand in its attempts to acquire more acreage -- at prices it intended to dictate to the market -- that the project's subsequent collapse didn't even inspire much regret along the Boardwalk. Now Pinnacle's got money tied up in Atlantic City it could be using to go trophy hunting along the Strip.

Also, it's not a good sign that Pinnacle's half-billion-dollar Lumiere Place is finishing a very distant second in the company's portfolio, doing only 57% the revenue of L'Auberge du Lac, down in Lake Charles, La. True, L'Auberge owns a near-stranglehold on its market, while Lumiere Place has several competitors. But the latter has scarcely made a dent in rival operations by Harrah's Entertainment and Ameristar Casinos. Nor, despite being smack-dab in the middle of the St. Louis waterfront, has it pulled significant amounts of business away from Casino Queen, across the river in Illinois.

Pinnacle has overspent and overcommitted itself -- and don't forget it nearly followed Columbia Sussex over the precipice in the feverish bidding for Aztar Corp. To Lee's considerable credit (no pun intended): A) corporate debt is below $1 billion; B) Pinnacle completely outfoxed Harrah's in their Lake Charles-for-Biloxi property swap; C) that Houston-fed market is rich enough to carry Pinnacle for the time being, and D) a clever if anti-competitive ballot initiative (for which Ameristar's Troy Stremming gets most of the credit) will entrench Pinnacle's Missouri position.

As 2009's gaming group goes, Pinnacle is faring better than all but a few. But it's made its share of MGM Mirage-like mistakes, just on a smaller, more-affordable scale. Pinnacle wasn't the only irrationally exuberant casino company during the 2005-07 boom but let's not go paint it as a paragon of restraint, either.

Deep within the septic tank that is the Las Vegas Review-Journal's online-comments section one finds the (very) occasional fact. In the case of the gaping void left at the Tropicana Las Vegas by the peremptory closure of Folies Bergere, longtime Vegas observer Phil Hevener had the following scoop: "One of the issues at the Trop was that the owners decided to leave the matter of a show for the new operator (Alex Yemenidjian) since show creators and hotel builders alike are having trouble finding money these days."

Not only does that have the ring of plausibility but when Hevener's got a tip, chances are you can take it to the bank. As for CEO Scott Butera and his underwhelming LV Trop administration, do you ever get the feeling they're just making it up as they go along?

Mandalay Bay is best in LV

Mon, 06 Apr 2009 11:36:00 -0700

It may be tempting fate to mention this, but online voters like Mandalay Bay best among Strip casinos ... or, at bare minimum, dislike it the least. Voters in the Steve Friess "Stripper Poll" on which casino most ought to be imploded have cast nary a ballot against the big place with the Komodo Dragon (seen giving rival casinos a Bronx cheer). As for the winners/losers of this ignominious race, Tropicana Las Vegas still holds the lead but only 16 votes separate its first-place status from the fourth-place spot held by Imperial Palace. "Impotent Palace," look to thy laurels!

Baseball season: Six months of alternating paradise and torment -- paid out in 162 increments -- begin today. This Los Angeles Angels fan is at best guardedly optimistic, seeing how the team continues to accrue one-dimensional sluggers, tubby Bobby Abreu being the latest specimen. Also, with our three top-shelf pitchers on the ... well, on the shelf for time being, the starting rotation is the weakest it's been since 2003.

Now with two of the best Angels of recent memory, Garret Anderson and Casey Kotchman, playing for the Atlanta Braves, I'm actually going to have to start thinking positive thoughts about the Braves, if not of their tiresome manager, Bobby Cox, whose incessant petulance wore out its welcome, oh, around 1991.

Case Bets: Kansas update, Cordish's push, Penn's prudence, taxing sex

Fri, 03 Apr 2009 18:32:00 -0700

Details of Lakes Entertainment's just-under-the-wire entry into the Kansas casino derby are beginning to emerge -- and it looks a bit half-assed. Particularly non-confidence-inspiring was the admission, "We're going to go find the cash." If somebody as flush as Phil Ruffin can't scare up $175 million, what makes Lakes confident it can score $260 million? Demote this bid from "contender" to "also-ran" status.

Another Kansas applicant also is moving aggressively elsewhere. Cordish Co. is looking to snap up three tracks owned by bankrupt Magna Entertainment. Racino conversion, though is not on the agenda, according to Cordish.

No fools. It looks as though Penn National has sworn off the Strip and small wonder. If execs at Harrah's Entertainment or MGM Mirage say they want to deal but insist on 10X-12X cash flow as their asking price, they're not going to find takers. I presume that their rationale -- and it's hardly without merit -- is that if business returns to the levels it enjoyed four years ago those multiples will go down.

Whether that argument will fall upon receptive ears seems unlikely. But look on the bright side: You could pay 12 times EBITDA for the Tropicana Las Vegas and it would still only cost you $54 million.

Five bucks a f**k? Sure prostitution is legal in 10 counties of Nevada, a state whose economy is built on the perception of an anything-goes atmosphere. But tax bordellos by the lay? Horrors!

Hard Rock scores, Trop flops

Wed, 01 Apr 2009 16:43:00 -0700

When the Hard Rock Hotel & Casino floated the prospect of as many as three resident headliners at its new The Joint, speculation centered on locally based names that were either predictable (The Killers) or uninspiring (Vince Neil). Instead, the HRH took pretty much everyone by surprise, landing an artist who's both a classic and a legend in his own time -- Carlos Santana.

He'll only be playing the equivalent of five weeks a year but the HRH will be Santana Central in the western U.S. until Jan. 1, 2011, so it's quite a coup. Richard Abowitz rehearses some of the pros and cons of the Santana-to-LV announcement. Additional headliners are expected to be signed but, for the nonce, Santana has given them a hard act to follow.

Santana HQ.

It couldn't be more of contrast to the "lively new [sic] entertainment" arriving sometime this month at the Tropicana Las Vegas. What have the forward-looking execs at Tropicana Entertainment conjured up? Two acts that have been bouncing up and down the Vegas food chain for years. Neither is a replacement for Folies Bergere. Instead, they'll do, er, share time in a refurbished venue inauspiciously known as "The Cellar," next door to the woebegone Player's Deli.

The early show, The Soprano's Last Supper, has been cooling its heels over at the Greek Isles, having decamped from the increasingly forlorn Riviera. Its late-night co-tenant, Hypnosis Unleashed, has been among the revolving door of shows spinning through the Harmon Theater. A previous incarnation, Dirty Hypnosis, played the House of Blues at Mandalay Bay. The $55 ticket price for Last Supper is a tiny increase on its Greek Isles tab, whereas $40 for Hypnosis Unleashed knocks 40% off its top price at the Harmon.

Obligated to put the best face on this roster of retreads, Trop President Ron Thacker said, "I believe we have created a star-studded entertainment line-up that will offer something enjoyable for everyone." And no, it wasn't an April Fool's joke ... we think.

What the Deuce! Word through the grapevine (I accidentally typed "gravevine" -- Freudian slip!) is that the sudden demise of Ivan Kane's Forty Deuce wasn't for lack of business -- quite the contrary. It's hinted that M'Bay is going in a more family friendly direction with the space, to coincide with the opening of The Lion King.

Economic recovery is just around the corner ... provided that you define "the corner" as three years from now.

Mr. Unwatchable. You'd think a documentary about a Harlem drug dealer who operated in brazen defiance of the law during period of 1976-86 would be inherently fascinating. The music! The (eyeball-searing) fashions! The bloodshed!

You'd think wrong. Former CineVegas entrant Mr. Untouchable is a snoozer, plodding along in the worst talking-head tradition. It will make you long for the breakneck pace and flashy style of, oh, Ken Burns. The Significant Other and I withstood a half-hour of Mr. Untouchable last night before bagging it. If this jive-less turkey is in your Netflix queue, expunge it forthwith!

Case Bets: Wynn, Adelson, casino closings & Number One

Mon, 30 Mar 2009 18:45:00 -0700

Last winter, I got a break on my rent -- but not nearly as good as the one Steve Wynn did. That's a nice deal, if you can get it.

Las Vegas Death Watch: In the latest "Stripper Poll" posted by Steve Friess, he asks which Strip casino should close first "if economic conditions warrant it." Through some glitch, the Tropicana was listed twice, so voters may be using two of their three votes on it. Either way, it's out in front with 40 votes, with hanging-by-a-thread Hooters second (31 votes) and Circus Circus, the casino people to hate -- and patronize -- third with 29, as of this writing.

The fourth-place showing by the customarily derided Imperial Palace counts, in this context, as good news for the IP. As for the Tropicana's prospects, I'd still count them better than Riviera's ... assuming Trop management gets its act together, which it shows few signs of doing.

Good news for Adelson: An analysis of the East Coast casino market finds Sands Bethlehem relatively sheltered from strong competition and likely to swipe business from two rival Pennsylvania slot parlors.

Whatever service workers get paid, it's not enough, as this story demonstrates. The indignity alone is impossible to quantify.

Trop snoozes, loses

Thu, 26 Mar 2009 15:23:00 -0700

Like a hot potato, the Tropicana Las Vegas continues to bounce from Columbia Sussex to Tropicana Entertainment and now maybe into the hands of Alex Yemenidjian. (This management-contract arrangement looks more like laying the groundwork for a sale ... if so, thanks for taking S&G's advice, guys. It's worth what you pay for it.)

A top price of $380 million can be viewed either as a bargain -- $11 million an acre, a long way down from the berzerk price paid by ColSux two-plus years ago -- or a boondoggle, seeing as even $380 mil represents an 84X cash-flow multiple. Somebody's got a job ahead of them.

Unfortunately, TropEnt CEO Scott Butera hasn't had his eye on the ball. Now, there wasn't anything he could do to keep the Titanic and Bodies exhibits from jumping ship to Luxor. But he pulled the plug on Folies Bergere and the Comedy Stop. Then, having given magician Dirk Arthur the boot, Butera's minions had to reverse field and grant the illusionist a reprieve through September. (So if you go to the Trop in April, the only entertainment offering will be an afternoon magic show. That's it.)

Just another day at the Trop.

As of Sunday, the Trop will have no (as in "zero") marquee attractions to tout. So it's an understatement to say that an agreement "in principle" with comedian Bobby Slayton doesn't come a day too soon and a formal contract needs to be inked yesterday.

When Nero played an as-yet-uninvented instrument, Rome burned. Whilst Butera fiddles, the Trop merely continues fade. Unless TropEnt's song and dance about repositioning the Trop is just a softshoe act, playing for time until the whole problem can be deposited in Yemenidjian's lap.

Ever since he took the reins at TropEnt, Butera has been fixated upon getting the Tropicana Atlantic City back (which he should) and, secondarily, with regaining Casino Aztar in Indiana (which he did). But the LV Trop has clearly been a low priorty and now he's washing his hands of it. Which means the real problem won't be Yemenidjian's but that of Trop employees and their equally neglected customers.

Patience, thy name is a Harrah's Entertainment bondholder. A surprisingly large number of these long-suffering souls are willing to wait just shy of a decade to redeem their distressed Harrah's debt. They're better men than I.

This book looks like a must-have. And, no, Huntington Press didn't publish it. But we do have a nifty new edition of Whale Hunt in the Desert, thank you for asking.

Case Bets: Macao, Icahn, Atlantic City, MGM Mirage, Sin City Kitties

Tue, 17 Mar 2009 17:17:00 -0700

According to Telegraph correspondent Ben Bland, Macao finds itself in a bind. Peking's efforts to prevent money from being siphoned out of the country have crimped high-roller play, forcing a greater reliance upon mass-market customers. But the recession is cutting into their gambling budgets, too. Who's having the last laugh in all of this? Who else but Stanley Ho? As we're learning, never underestimate old Stan's ability to survive. He's probably found a loophole out of death, too. (But somebody needs to clue Bland in that Celine Dion doesn't play Vegas these days.)

Icahn's in: Well, sorta. Although the former Stratosphere owner is officially making a play for the Tropicana Atlantic City, he wants -- get this -- another six months to close the deal. Since the sale of the Trop was supposed to have been wrapped up 11 months ago, regulatory patience is finally running thin. Keeping the Trop in a 21-month limbo is grossly unfair to its long-suffering employees, too.

Icahn's equivocations could send the Trop caroming straight into the arms of Cordish Co., although it's unclear whether Cordish is still interested. Had chowderheaded, state-appointed trustee Gary Stein -- who was characteristically out of the loop on the Icahn bid -- closed the deal when deals were still to be had, all of this would be ancient history. New Jersey Casino Control Commmission members should be marched off to the woodshed for appointing Stein and then tolerating his interminable (and very expensive) bungling.

Elsewhere in New Jersey, solons have relieved Atlantic City's denizens of their second-class citizen status, albeit with many clauses and exceptions. This was accompanied by the usual howls about casinos wielding untoward influence (they can't even make political donations, which seems blatantly unconstitutional), although "juice" from other industries -- like the sacrosanct horse-racing business -- is implied to be hunky-dory. The horsey set's constant pining for slot machines gets a cold shoulder from the voting public, however.

Remember how I forecast that MGM Mirage's $1.2 billion writeoff of much of the value associated with former Mandalay Resort Group properties was going to kill 4Q08 earnings? Well, it did. However, the company supposedly still doesn't want to take on equity partners in anchor-around-the-neck CityCenter. "I'd be surprised if they dilute the joint venture [with Dubai World]," says a Reuters source. Geez, seems like if they'd "diluted" it with additional partners earlier on, they might not be hawking the family silver to raise completion money. Pride goeth before a ... well, you know.

Literacy-challenged Kitties: There's no better topless show on or off the Strip than the Sin City Kitties, who perform all the way out at Whiskey Pete's (which boasts a surprisingly spacious showroom). OK, I haven't seen Fantasy, probably because Luxor insists on advertising it as "Carrot Top Fantasy." As one wag observed, those are three words that should never inhabit the same sentence.

Anyway, Sin City Kitties is the only topless show I've seen that's predominantly erotic, as opposed to having a good number or three. And none of the girls betrayed signs of "enhancement" on the night we saw it, when it played to an appreciative audience of leathernecks and other servicemen.

However ... somebody needs to inform these pussycats that what they perform is not a "topless review [sic]" -- unless they plan to critique other topless shows from their stage in Primm.

"The Harry Reid Train": The asshat who made this fumbling attempt at an "ambush interview" might want to learn what the "Harry Reid Train" is (or more accurately, isn't) before attempting to smart-mouth Rep. Dina Titus (D-NV). Titus brushes off the uninformed oaf with the contempt he deserves. And hey, that's the "Sin City Express," bucko. Don't go messing up our catchy new brand name.

Quote of the Day

Tue, 17 Mar 2009 14:54:00 -0700

"This is how Caesars is treating its employees, while our CEO made $15 million in compensation. I'm quite sure no one in [Gary Loveman's] household is cutting their pills in half to get by." -- Caesars Atlantic City dealer Sharon Masino, complaining about Harrah's Entertainment's foot-dragging approach to contract negotiations (a problem shared by employees of Tropicana Entertainment and Trump Entertainment Resorts -- but not MGM Grand Detroit). Harrah's inaction led to the cancellation of an AFL-CIO convention at Paris-Las Vegas.

Case Bets: Trop, AZ Charlie's, Midnight Jim

Fri, 13 Mar 2009 14:52:00 -0700

When I picked up the latest LVA and read that Xtreme Magic was getting ashcanned by the Tropicana Las Vegas, effective April 2, I began to wonder if CEO Scott Butera's promised new-look Trop was ever going to manifest itself. Because, whether the place was run by Columbia Sussex or Tropicana Entertainment, management had evinced three basic strategies: 1) subtract, 2) subtract again and 3) subtract some more.

However, the Great Amenity Massacre has finally come to a halt. The former Comedy Stop will become the new den of "Pitbull of Comedy" Bobby Slayton, making a step up for Hooters Casino Hotel. I've not seen Slayton in action but people whose opinion I trust say he's very good. He should give the Trop a much-needed infusion of personality. Welcome to the Strip, sir.

A colleague also informs me that the much-traveled Soprano's Last Supper will alight at the Trop, too. Surely this isn't the long-hinted-at successor to Folies Bergere? Say it ain't so, Scott!

In a break with tradition, neither of the two Arizona Charlie's hotels is taking bookings past May. Goldman Sachs' third wholly-owned Vegas casino, the Stratosphere, is continuing to accept reservations into the summer months, however.

Mehtinks the hotel-closings virus is spreading from Primm and Mesquite. Besides, with so much downward pressure on hotel rates even at the top-notch off-Strip hotels, the customers who'd normally gravitate to AZ Charlie's can afford to "trade up."

Liar, liar, pants afire: Remember the hotel room-tax increase, Nevada's "fuck you" to its tourism base? Seems that Gov. Jim Gibbons was for it on at least 10 occasions before he was against it. (Or maybe he was against it, then for it, then against it again).

Of course, Midnight Jim can always wriggle out of this on the technicality that he never said he'd actually, physically sign the bill. Also, his staff issued a bizarre locution that the guv was against "putting new taxes directly on the people." So does that mean he's in favor of indirectly instituting new taxes? And how, precisely? (Well, actually we know, at least as it concerns gaming: Accelerate tax collections on bad markers and tax comped meals.)

Considering that reality and Jim Gibbons normally intersect to form a null set, it's probably just another sample of the meaningless verbiage Nevadans have come to know and love. It'd go right down there with "stirring up the bottom of the bathtub," of which no one was ever able to make sense.

Update: At least Gibbons has the virtue of providing amusement, unlike the disgraceful and equally spineless Lege, whose fiddling while Nevada burns is too depressing to contemplate more than briefly.

Elsewhere in the 'sell block'

Mon, 02 Mar 2009 15:44:00 -0700

Note: Parts of this were published earlier but got devoured by our resident Comment-Eating Server.

The Motley Fool paid another visit to the sickroom and found Las Vegas Sands even sicklier than it when it was first pronounced a "deathbed stock," $61.95/share ago. But despite being down 'merely' 58%, Isle of Capri Casinos was pronounced "gravely ill," following the announcement that it would be temporarily suspending racing at Pompano Park. (Yikes!)

Add that harness track to the list of Goldstein Era show horses that have turned out to be broken-down nags for current CEO James Perry. While the sport of kings is a terminal patient, nobody -- yours truly included -- foresaw that Florida racinos and slot-enhanced parimutuels would be a duff proposition. Even if the Seminole compact is revised to put parimutuels and tribal casinos back on a level playing field, the Seminoles' lead on the private-sector casinos is several furlongs and growing.

Not in Kansas anymore: The messed-up casino-development process in Kansas won't be Gov. Kathleen Sebelius' problem for much longer. But governor, how does it feel to have to take sloppy seconds from D.C. retread Tom Daschle?

Nevada's overreliance on casino taxes has caused yet another leak to spring in the state's budget, a thing of shreds and patches even in the best of times.

Poker: The Musical. At last, the problem of the Tropicana Las Vegas showroom is solved! (Although it would be pretty damn funny in an unintentional way if you booked a tuner called Poker playing a casino that closed its poker room.) The official site can't be bothered to host sound clips, so head on over to Napster for a sample or 10.

Strike at the Trop

Mon, 02 Mar 2009 14:50:00 -0700

No date certain has been set for Tropicana Atlantic City dealers to hit the bricks but their patience has run out. This sorry state of affairs has been brought to pass by New Jersey Casino Control Commission-appointed trustee Gary Stein. Under the once-admirable principle of not wanting to lock new ownership into a union contract negotiated by receivers, Stein has justified punting this football further and further down the field.

Stein's position has been rendered untenable by his own feckless tenure, as he frittered away several pricey bids for the Trop last spring and now looks like he's let a downsized Cordish Co. offer slip through his butterfingers, too. This guy couldn't sell lemonade in Death Valley on the hottest day in August ... and to think that, if he got his way, the 15-month sale process would be further extended into May!

Blame also accrues to ~~Stein's handpicked interim~~ Trop administration, ~~headed by Pam Popielarski,~~ which has decided to charge dealers more money for fewer benefits. Belt-tightening may be the order of the day on the Boardwalk but to do this in the teeth of a contract negotiation is tantamount to an outright provocation.

This latest incident removes any doubt that the NJCCC should either put Tropicana Entertainment CEO Scott Butera behind the wheel (with the NJCCC acting as faculty monitor, if need be) or broker a deal with lead creditor Carl Icahn to appoint TropEnt as casino manager if Icahn prevails at the bankruptcy auction. When a strike looked inevitable at the Tropicana Las Vegas, Butera was quick to make peace. Let's hope he can do the same in Atlantic City.

Lobster heist. Down the street at Bally's Atlantic City, security nabbed a crustaceon thief, in an incident straight out of Paul Blart, Mall Cop.

Quote of the Day

Tue, 24 Feb 2009 11:36:00 -0700

"[Columbia Sussex CEO William J.] Yung showed a callous disregard both for New Jersey casino auditing regulations and for the requirement that any Atlantic City casino be a 'first-class facility of exceptional quality.'

"But if the restructured Tropicana Entertainment can prove it is indeed a new company that meets the state's licensing requirements, that would be the quickest way to get the Trop out of limbo and into the hands of new owners." -- from an editorial in The Press of Atlantic City, endorsing TropEnt CEO Scott Butera's push to have the Atlantic City Trop restored to the fold.

How desperate is Scott Butera?

Thu, 19 Feb 2009 18:08:00 -0700

Perhaps sensing that the Tropicana Atlantic City is slipping irretrievably from his grasp, Tropicana Entertainment CEO Scott Butera has taken his case to the media -- seeking an audience with the editorial board of The Press of Atlantic City, no less. Butera has a persuasive manner, as you'll hear in the attached audio excerpts. Repositioning the Trop as a smoke-free property seems a bit out there but it has the virtue of novelty, so let's give it the benefit of the doubt. (There is a serious disconnect, though, between what Butera thinks the Trop to be worth and what the market is telling him.)

Butera's real sales job is going to be with the hard-to-convince New Jersey Casino Control Commission, of course ... a task not made any easier when TropEnt sole shareholder William J. Yung III popped up at a New Jersey Supreme Court hearing on the Trop's fate, about as welcome a sight as Banquo's Ghost. Short of drawing and quartering Yung in front of the assembled NJCCC, I'm not sure what Butera can do that will guarantee him a fair hearing.

He might have one ace left to play by throwing his support to Carl Icahn's mooted stalking-horse bid. Even if Icahn doesn't really want the Trop, the mere possibility that he could throw all or most of $1.4 billion in secured debt onto the table should force rival bidder Cordish Co. to either pony up some real money (instead of incessantly haggling) or drop out. Of course, Butera needs Icahn more than Icahn needs him; the old corporate raider could always rustle up Richard Brown and the rest of the old ACEP band and run the Trop himself.

Still no word on whether Colony Capital will be run out of Resorts Atlantic City or not. The NJCCC is playing this close to the vest. From a logical standpoint, Colony's argument that Column Financial can't be allowed to take over because the latter doesn't have a gaming license (and never mind that Colony is three months in arrears on its mortgage) is silly. It's like saying your banker can't repossess your car because he doesn't have a driver's license.

However, the law is something else again and Colony appears to be on firm ground there unless Column can make the case for a state-run trusteeship. Not that such an arrangement worked out entirely well in the case of the Trop.

Trop's agony soon to end?

Wed, 18 Feb 2009 15:59:00 -0700

The bad news is that the New Jersey Casino Control Commission has voted to grant yet another extension on the interminable sale of the Tropicana Atlantic City. The good news that it's merely been pushed out another month, not the three that butterfingered trustee Justice Gary Stein wanted. The NJCCC finally seems to have run out of patience with this comedy of errors and past time, too.

Then again, the prospect of a Carl Icahn purchase concentrates the mind wonderfully. Since it's a credit bid, neither the State of New Jersey or former owner Columbia Sussex will see the payday they've been envisioning. But if Icahn can get his affiliated creditors to put their whole $1.4 billion in secured debt on the table, it'd crush anything Cordish Co. has offered or is likely to. The mere specter of Icahn has to be very bad news for Tropicana Entertainment CEO Scott Butera. Since the Trop is the engine that drives (or drove, before ColSux CEO William J. Yung III crashed it) his company's bottom line, Butera has been tireless in his quest to re-obtain the property. If he succeeded, it would also allow him to return victoriously to the market where he made his name as Trump Entertainment Resorts' boss. But, through no fault of his, TropEnt is in far worse standing in the Garden State than is Icahn.

If Icahn is primed to re-enter the casino industry that he left not so long ago, it's a positive augury both for Atlantic City and the business as a whole. It would also enable him to cock a snook at Pinnacle Entertainment, which purchased the old A.C. Sands from Icahn, quickly demolished it, then has been high and dry ever since. Under Icahn's ownership, the Stratosphere went from being a joke to a successful casino property. His taste in casinos isn't always pretty (Arizona Charlie's, anyone?) but it's proven smart and successful.

Going down in Illinois

Tue, 10 Feb 2009 17:56:00 -0700

When it comes to Upper Midwest casinos, there's Illinois and then there's Everyone Else. Except that, in this case, you want to be "Everyone Else." Being Illinois sucks.

January numbers for Missouri aren't out yet but Iowa is up 3%, Indiana is seeing a 12% surge ... and Illinois is -9%. That's on top of the -18% hammering the Land of Lincoln took a year ago, when smoking in casinos became a no-no. Whatever impact the recession is having on neighboring states' casinos, refugee players from Illinois riverboats are more than compensating.

The news isn't quite as good as it could be for Indiana, where the gain is more than offset on a same-store basis by the dilutive effect of two new-ish racinos and Harrah's Entertainment's Horseshoe Hammond behemoth. These ill-timed (for their competitors, that is) expansions have left everybody else slicing the ham thinner, in Fred Harvey's dying words. (The restaurant mogul's last utterance was alleged to be, "Slice the ham thinner." And, no, he wasn't an F&B executive at Station Casinos.)

Some salient Indiana facts ...

• Expansion of Horseshoe Hammond is not only a positive (+16%) in itself, it's more than making up for softening at Horseshoe Southern Indiana (-3%). Was taking the Caesars brand off the latter a good idea? Just asking.

• French Lick is licked (-14%). Somebody has to be in last place and Indiana's only land-based casino is "It."

• Ameristar East Chicago is feeling the Hammond Effect (-4%) but surpasssed analyst expectations nonetheless.

• Grand Victoria is in freefall -- eight straight months of double-digit declines, including last month's -26%. Will it hit bottom before it passes French Lick on the way down? Speaking of the bottom ...

• Congratulations to Boyd Gaming's Blue Chip (-2%), which is finally pulling out of a protracted skid. If Boyd can live with 65-70% of Blue Chip's pre-2008 performance, the future -- thanks to a newly augmented casino-hotel -- inspires hope.

• Majestic Star II needs to be moved (an idea that's getting kicked around by various governmental bodies). While its sister ship is hanging in moderately well, Majestic II's year/year comparisons are almost as dreadful as Grand Victoria's.

• The turnaround of Casino Aztar (off but three-tenths of a point) remains 2008's #1 success story in the industry.

Racinos were less of a factor in Iowa, were they were flat while riverboats nudged their revenue up 4%. The three tracks, though, do generate roughly a third of the state's casino revenue, while 14 riverboats divvy up the rest, not counting tribal casinos (which don't report revenue).

• Harrah's Council Bluffs (+4%) stole market share from Ameristar's rival facility (-6%), but the latter still does nearly double the business ($13.4 million to $7.7 million).

• Positive comparisons at two of Isle of Capri's four Iowa casinos were more than offset by declines at the other two, for an aggregate of -2%.

• Two smallish riverboats, Diamond Jo and Mississippi Belle, enjoyed spectacular improvements in January, +104% and +51%, respectively.

All generalizations about Illinois are false in the sense that there are exceptions that prove the rule. For instance, while the smoking ban has quantifiably been death for Illinois casinos, the first one to open as a non-smoking casino -- Casino Rock Island's new facility -- has been up 118% and 112% in the last two months. Is there something about not being able to smoke in a casino that still smells of cigarettes that's worse for business than not being able to smoke in a nice, fresh facility?

Another paradox is that the casino one would think most likely to feel the brunt of St. Louis-area competition, East St. Louis-berthed Casino Queen, was the last to experience the downturn that was sweeping the rest of Illinois and is now almost back (-3%) to year-ago figures, which themselves were only -2% from January '07.

With Boyd's Par-A-Dice (-5%), Harrah's Metropolis (-9%) and Penn National's Hollywood Aurora (-7%) decelerating from last year's precipitous declivity -- when they were -10%, -19% and -16%, respectively -- one would like to believe that the bottom is near for Illinois, but the Penn boat is the only bright spot in Chicagoland and the same company's Alton Belle (-15%) is still taking it on the chin from Missouri.

Boardwalk bummer

Tue, 10 Feb 2009 15:42:00 -0700

In short, January's Atlantic City revenue numbers are -9% at the tables and -10% in slots. The glass-half-empty spin is that this is the third straight year of decline. The glass-half-full perspective would be, yes, but it's -9% the fifth-highest January in Atlantic City history (with '06 being the high-water mark). And if you were at Trump Taj Mahal, you had no complaints whatsoever.

In sheer dollar volume, Bally's Atlantic City got hammered, down from $45 million to $37.6 million. Only the newly revamped Taj posted an increase in revenue, going from $38 million a year ago to $42 million this year. The in-flux Trump Marina (-8%) has at least temporarily bottomed out -- at last place in dollar volume, behind even insolvent Resorts Atlantic City. (Because of disparities of scale, this can be a deceptive metric, though.)

Aside from the Taj's non-aberrant 10% gain, the closest thing to victory could be declared by Harrah's Marina, only -2%. Both properties cleaned up at the tables (+22% and +19%, respectively), while Borgata did so at the slots (+16%) -- a good thing in the latter case, because the Boyd Gaming property got slaughtered in table play, -26%. However, it could take cold comfort in the fact that Trump Plaza (-29%), the Atlantic City Hilton (-32%) and Resorts (-36%) all fared worse. Luck just isn't with Resorts/Hilton owner Colony Capital these days.

The second-best showing in slot win was the Taj (+2%), with the Tropicana Atlantic City in third place with -6%. The worst clobberings were absorbed by Resorts again (-22%), Bally's (-23%) and Showboat (-24%). Overall, the Taj edged Caesars Atlantic City (-8%) out of the top tier, back toward the Trop (ditto). Thanks to the Taj makeover, Atlantic City has four "haves," four "have-nots" and a couple of Harrah's Entertainment properties that could go either way. Plus the ever-mystifying Trop, of course.

Report from the Boardwalk:

Mon, 09 Feb 2009 17:39:00 -0700

A frequent LVA reader from New Jersey writes:

Yesterday (Sunday) was an unseasonably warm day here in New Jersey and I decided to take a two-hour drive to Atlantic City to shake off the mid-winter cabin fever, walk the boards and play a little poker. What I saw -- and I've been going to A.C. since 1982 -- astounded me.

Based on past years, a warm February Sunday following prolonged freezing weather would have brought people out in droves. There were people out and about, but in nowhere near the numbers of the pre-recession days. Looked like a weekday in March. A good portion of boardwalk merchants -- about half -- weren't open. The cheesy gift shops, some eateries and the salt water taffy places were doing some business.

Spent the day at Showboat, because its refurbished poker room is comfortable and quite low-key. Used to play at Tropicana, but gave that place up following the bankruptcy. The Showboat casino was nearly empty. Very quiet. One could jump on any slot/video poker machine. A $5 BJ game was open and full. I haven't seen $5 BJ in A.C. in more than 10 years.

Three craps games open. One was dead. However, the rest of the tables were relatively busy in comparison to the slots -- including the Big Six wheel and Rapid Roulette.

Poker room was relatively quiet, but that was due to the Bad Beat Jackpot being hit the night before. The daily tournaments are always full.

Rooms were available for Sunday night walk-ups at $39. There was absolutely no one waiting to check in at 6 p.m. In fact, the only "crowd" I saw all day was the on the hotel checkout line at 12 noon.

Hit the French Market Buffet for dinner. Up until a couple of years ago, wait times for this very good eatery could top an hour at times even on weekdays. Not yesterday. Walked right in. Half the seating area was closed. A sign stated the buffet is now closed on Wednesdays and Thursdays due to lack of demand. The 24-hour coffee shop was closed until the buffet stopped serving (9 p.m.), at which time it was scheduled to re-open.

The height of audacity was the $10 charge for parking in the Showboat garage and $15 for valet parking. Highway robbery. I wouldn't pay it. I parked in the open air lot across the street for free and hoofed it.

Just some recessionary signs of the times here in N.J.

Mixed message from Penn

Fri, 06 Feb 2009 12:10:00 -0700

Having pulled the plug on his latest Atlantic City venture, Penn National CEO Peter Carlino served the city a heaping plate of gloom with a side dish of pessimism. In fact, he pretty much slammed the door on the besieged metropolis, although his spokesman reopened it a wee bit.

Quoth Carlino: "I think as we've watched New Jersey, sadly, that's a market at the moment that is significantly less appealing to us, and that shouldn't be a surprise. There is much more bad news coming ... [Pennsylvania slot parlors are] nothing but bad, bad, bad news for Atlantic City. It's going to be a while, and maybe a long while, before the picture changes in Atlantic City. It's not a pretty picture."

In other words, he didn't just plunge a dagger into the heart of Atlantic City, he twisted it around a bit for good measure. Also, Penn's legal representative on the Boardwalk is a co-owner of A.C. nemesis Harrah's Chester. Coincidence perhaps, but the symbolism is painful.

Then again ... a Penn representative says the company will "evaluate the opportunity" as Bader Field continues to be shopped around. So Penn isn't really giving up on Atlantic City after all and Carlino's verbal barrage begins to sound like a "softening up" bombardment, preperatory to pushing for a better deal on Bader Field.

Carlino is right to wary of the potential threat from Philadelphia but anybody contemplating an Atlantic City investment is going to find themselves between that rock and the hard place that is the realization that new (or significantly refreshed) product and nothing else will suffice in A.C. Unfortunately opportunity -- the gnarled casino-development process in Philly -- and crisis, in the form of an economic deep-freeze -- have coincided, leaving the status quo drifting along.

There's a variety of low-hanging fruit in Atlantic City: the 14 acres MGM Mirage is peddling; Pinnacle Entertainment's stalled Sands site; the Tropicana; perhaps even Bally's Atlantic City or a management contract at Resorts Atlantic City, if the foreclosure goes through. Not to mention the Trump Marina sale, which seems to have devolved into slow-fizzle mode. But if Penn is sending a signal, it's translating as "Bader or Bust!"

Quote of the Day

Thu, 05 Feb 2009 16:11:00 -0700

"Tropicana says its five-year plan calls for the company to grow its revenue base, maintain its current level of operating expenses and improve net income." -- from a GlobeSt.com profile of Tropicana Entertainment's image makeover. Higher revenues on a static operating budget? It'll be interesting to see how that's implemented.

Case Bets: Seminoles, Tropicana, Shuffle Master, Stanley Ho

Tue, 03 Feb 2009 14:12:00 -0700

Seminoles offer to lay $288 million and 12,000 new jobs on the table, for starters. Sunshine State Republicans blow them a raspberry. Constitutional or not, Gov. Charlie Crist's compact put a good deal in place for both sides. (It wasn't so good if you were a non-tribal casinos, but they'd been underperforming even before Crist gave the Seminoles table games.) Unfortunately, Florida solons seem bent on pissing it away for a variety of reasons, spite -- mainly toward Crist -- not least among them.

Good news at Trop(s). It's a rare and welcome day for Tropicana Entertainment when it can announce not one but two pieces of good news in the same day. At the Tropicana Las Vegas, a marketing firm has been retained to try and reposition the LV Trop as a service-and-value-oriented property. TropEnt promises "to elevate its service and value standards,” in a slap at Columbia Sussex, its nominal parent company.

Out East, you can stick a fork in the Cordish Co. purchase of the Tropicana Atlantic City, now that the former has missed the deadline for reaching an agreement. What's the response from hapless Trop trustee Gary Stein? Why, to extend the sale another three months, of course. His Plan B would involve dropping any minimum-bid requirement from the bankruptcy auction.

Sending the Trop to Chapter 11 auction without a stalking-horse bidder hardly looks like a strategy that will drive the price up. ColSux was a lousy owner but neither it nor its creditors deserve to be ripped off like this.

As for Cordish, Stein is playing the role of battered spouse in a co-dependent/abusive relationship. Cordish, he coos, is still "actively engaged ... They have certainly not withdrawn." Why anybody would still listen to Stein, whose credibility is somewhere south of zero by now, is a mystery for the ages. Enough! It's well past time that the New Jersey Casino Control Commission sacked this sorry excuse for a trustee. These monkeyshines aren't remotely funny anymore and the vaudeville hook is way overdue.

Unless the NJCCC knows something the rest of us don't, there's no longer any viable excuse for not giving TropEnt at least a probationary interval as owner/operator. Its creditors have every incentive to make revenue grow there if they're to see their money again -- unlike ColSux which was acted as though it was perfectly happy to drive financial performance straight into the ground so long as the Trop was run on the cheap.

At least one Wall Street analyst likes Shuffle Master's choice of CEO better than I do. Timothy Parrott is a great guy for all I know, but there's little in his recent background to suggest that he's the turnaround specialist Shuffle Master needs.

Stanley Ho, sugar daddy. The godfather of Macanese gambling has shown a sudden upsurge of interest in the fortunes of Australia's Labor Party, funneling $587,000-plus into its coffers. As though to prove it isn't completely Dr. Ho's bitch, the ALP returned $326,000 from Angela Leong (aka Mrs. Stanley Ho). Because, you know, they've got standards. Yeah, that's it. (It's not unlike the Obama administration's exception-proves-the-rule attitude toward appointing lobbyists to critical guvmint jobs. Plus ça change and all that.)

Seems the ALP has been talking a good game about cleaning up campaign finance -- and the conservatives who've been resistant -- while raking in beaucoup HoBucks, even if they say they returned two-thirds of the money. Because $195K is totally cool but $587K would be de trop, I guess.

Or was the total extent of ALP-accepted Ho largesse even larger still ... like $912,000 maybe? The numbers are all over the one place but one thing is for sure: In the words of Opposition parliamentarian Michael Ronaldson, "The whole deal simply doesn't pass the sniff test."

Sign of the times II

Mon, 02 Feb 2009 18:09:00 -0700

This image, taken Saturday at the Plaza Hotel & Casino downtown, pretty much speaks for itself. Auction holders Real Estate Disposition Corp. were scheduled to hold another auction today. The choice of the down-on-her-luck Plaza as venue is apt ... although if the REDC had a sense of black humor, it'd hold its foreclosure auction at the in-Chapter 11 Tropicana Las Vegas.

Photo: © Erik Kabik/RETNA

The best thing that could happen to the Plaza would be if this Forest City casino project went through, just behind the Plaza on a portion of Oscar Goodman's famous 66 acres. The potential foot-traffic benefits are obvious and brand-new competition downtown might finally force owner Tamares Group to get off its duff and reinvest in the Plaza -- assuming it hasn't flipped its misguided real estate play and fled town by then.

Another Benny Binion descendant dies before his biblical allotment of three score and 10 years has run its course.

It's a trend! The prime minister of China is the latest shoe-throwing victim. If this continues to catch on, it could really liven up shareholder meetings -- especially those of Las Vegas Sands.

Head-scratcher at Shuffle Master

Mon, 02 Feb 2009 15:02:00 -0700

Come March 15, Shuffle Master CEO Mark Yoseloff finally gets to leave the company -- something he's wanted to do for a while but which has been stymied by the difficulty of replacing him. Just how difficult was it? So much so that Shuffle Master's board settled on a relative lightweight: Timothy Parott, who was Aristocrat Technologies' CEO of American operations for 2006-08. Prior to that, Parrott -- a newcomer to the manufacturing side -- had been out of day-to-day casino operations for eight years. To make a bad slot-machine pun, it was a move from well outside "the box."

Industry scuttlebutt had it that subsequently discredited Aristocrat Leisure CEO Paul Oneile wanted to exert more direct control of Aristocrat's North American operations and that the Parrott appointment furthered that brief. (Parrott's exit from Aristocrat Technologies roughly coincides with the appointment of Jamie Odell to succeed Oneile.) It looks like the power behind the Shuffle Master throne will be board chairman and former Greenspun Corp. President Phil Peckman, who steered the Greenspuns into the casino business but subsequently fell from favor.

You've been served. Can a casino be held responsible for being in receipt of (allegedly) ill-gotten gains? The Venetian gets to be a guinea pig. Lucky them.

"An instructive example of Murphy's Law." That's the verdict from Liz Benston on the botched, bungled and increasingly beleagured Tropicana Atlantic City sale process. If anything has gone right in that snipe hunt, it's escaped my notice.

Atlantic City: Two strikes, no balls

Thu, 29 Jan 2009 18:05:00 -0700

This was originally going to be "Death Watch VI" but three of those in a week is positively ghoulish. So, on to the latest disheartening developments from Atlantic City, the casino market that just can't catch a break.

Cease the revels! Taking a page from the Harrah's Entertainment playbook, Revel is calling a halt to interior work and will concentrate on finishing the exterior of the $2 billion resort. It had weathered the loss of several key executives in a plane crash and an attempted shakedown by Unite-HERE, but now it's basically running out of money. The possibility of a joint venture has now been floated. (Hey, Penn National, here's your chance to get onto the Boardwalk without having to buy the land or even put up most of the construction cost.) Starting a multi-billion-dollar resort project without all of one's financing in place may be standard practice, but it's caused project after project to go begging as Wall Street's purses snap shut.

It seems disingenuous, though, for Pinnacle Entertainment to cite Pennsylvania casinos as a potential reason not to move forward in Atlantic City. True, Columbia Sussex CEO William J. Yung III completely "misunderestimated" the Pennsylvania threat, but he wasn't the sharpest knife in the drawer when it came to running casinos and evidently never familiarized himself with the A.C. market. Pinnacle, they're supposed to be the smart guys, so they had to know full well what they'd be up against when they took a wrecking ball to the Sands back in '07. One would expect no less of them.

The cruel irony to all of this is that, during a time when casino development in Philadelphia has been deadlocked and ineffectual, buying precious time for Atlantic City, the economic crunch has sent project after project either into paralysis or onto the slag heap.

The New Jersey Casino Control Commission in executive session.

Trop the madness! If such a thing were possible, the Tropicana Atlantic City has even fewer slot technicians now than during the slash-and-burn ColSux days. And the techs have voted to strike, which may trip a rolling series of walkouts. Table game dealers would be the next ones out the door.

There's a mixed message coming from Trop HQ. President Mark Giannantonio insists he's been bargaining in good faith. But his hands may be tied by slowpoke trustee Justice Gary Stein, whose public posture has been that it would be unfair to the next owner of the Trop to be saddled with a labor contract negotiated by state-appointed interim management.

I agree, in principle. But in practice that admirable restraint has resulted in Trop employees being strung along while Stein takes his own sweet time getting a sale into place. A picket line would be yet another unfunny act in the farce caused by the New Jersey Casino Control Commission's lack of testicular fortitude when dealing with its dawdling surrogate. It should have told Stein to get the most viable deal and get the hell on with it 10 months ago.

Which is one more argument for taking a chance on Tropicana Entertainment CEO Scott Butera (a dice-throw that seems like less and less of a gamble by the day). When ColSux brinksmanship seemed to have the Tropicana Las Vegas headed for a strike, Butera brought the crisis to a swift and statesmanlike conclusion. He'd probably do the same thing in Atlantic City. It's a situation that calls for decisiveness, a quality not greatly in evidence right now.

Miracle in Atlantic City

Thu, 22 Jan 2009 13:28:00 -0700

Just when it looked like hope was all but lost for Tropicana Entertainment CEO Scott Butera in his quest to regain the Tropicana Atlantic City, some slippery moves by Cordish Co. have put the Trop back in play ... and possibly straight into Butera's arms.

After fumble-prone Trop trustee Justice Gary Stein spurned several purchase offers (including a hefty one from Cordish) last spring, the economy went southward in a hurry and so did interest in the Trop. Cordish, no fools they, lowered their offer to $550 million. UNLV's David G. Schwartz has made a persuasive case that if Cordish's second offer wasn't right on the money it was in the ballpark. However, now Cordish wants a red-tag sale discount of undisclosed proportions, despite claiming to be "absolutely enthusiastic" about its would-be acquisition.

With TropEnt owner William J. Yung III basically neutered (though not yet out of the picture entirely), creditors want the Trop entrusted to Butera. But the New Jersey Casino Control Commission, seemingly blind to reality, has given Stein a fifth extension on his decreasingly fruitful negotiations. The NJCCC and its appointee have handled this interminable transaction with manifest incompetence from start to finish and the vaudeville hook is overdue.

Butera's creditors are owed $1.3 billion. If his 2009 EBIDTA projections (which include the A.C. Trop) are correct, a sale of the whole TropEnt kit 'n kaboodle at 8X cash flow -- an optimistic prospect, I admit -- would bring roughly $1.25 billion. So, in theory, he's within shooting distance of making them whole. Heck, the X factor of being on the Las Vegas Strip for cheap would likely goose the asking price sufficiently to close the gap and then some.

As for Cordish, while $550 million for the Trop may reflect fair market value, trying to discount it to, say, a Trump Marina fire-sale price would be highway robbery. The Trop is a middle-of-the-pack performer on the Boardwalk and its MSRP should reflect that. Of course, to quote Margaret Carlson, the fact that I want a million dollars and a Porsche (in my case, a Mercedes) doesn't mean I'm going to get them.

Still, it seems clear that the NJCCC has two choices -- three, if you include prolonging the galumphing Stein/Cordish song-and-dance act. Regulators can either take their chances in bankruptcy court and risk getting very little indeed -- or simply banish those visions of dollar signs that dance in their heads. I humbly resubmit my sub-solomonic solution: Give TropEnt a one-year probationary license and take it from there.

Atlantic City Death Watch IV

Wed, 21 Jan 2009 17:49:00 -0700

Although Resorts Atlantic City, the Atlantic City Hilton and Trump Marina continue to circle the drain, they may have company. To wit ...

The fourth time's the charm. After three stints in Chapter 11, what's one more for Trump Entertainment Resorts? Something a journalist friend said six years ago remains as true as ever: "All Trump ever does is restructure his debt because that's all he can do!" Even if an(other) extension is granted, this company's obstacles look insuperable. And, pardon my saying so, but predicating your future in Atlantic City on building a casino in your primary feeder market (Philadelphia) makes almost as little sense as a cat chasing its own tail. Harrah's Entertainment tried something very much like that and it didn't work.

Layoffs return to Trop. This time it's dealers who'll feel the brunt. In Tropicana Atlantic City management's defense, it's wielding the cost-cutting knife far more judiciously than did its predecessor. Employee matching contributions to the health plan may be going up, but the lower-paid workers can still expect a salary increase. The more stringent belt-tightening is reserved for the top of the Trop food chain, with senior execs suspending their own 401(k) matching contributions. That's leadership by example, something a few other companies (coughStation Casinoscough) ought to have considered.

Bader Field -- to sell or not to sell? He may act crazy as a loon sometimes but Mayor Lorenzo Langford isn't wrong to want to take Bader Field off the market at a juncture when interest in the site has evaporated. Dangling it out there another six months is hardly likely to entice better offers.

Besides -- and much to Langford's vexation -- the State of New Jersey can nix any sale for which it doesn't care. That already happened when Penn National had an $800 million offer on the table. Penn thought there was enough Bader acreage to carve out four or five casino sites, keeping one for itself and making a tidy profit from the transaction.

Unlike the days of Steve Wynn's abortive Marina District venture, nobody's in the mood to give away land in Atlantic City anymore. At least Wynn -- presuming he's even still interested -- wasn't looking at it as a blatant 'flip' (an indiscreet admission by Penn that probably cost them the deal). And he can make a persuasive case, if he so chooses, that the economic benefits of a Wynn Resorts property in Atlantic City considerably outweigh the immediate gratification of an $800 million-$1 billion upfront payment.

Heck, given the farce that has befallen Pinnacle Entertainment's Boardwalk project, it'd be worth calling Dan Lee's bluff to see if he'd really take his ball and go home. Like Macbeth, Pinnacle is in so deep right now that it doesn't have much choice but to keep going forward. As for Wynn, he hasn't evinced much interest in Atlantic City lately. If he's gone cold on it since August of '07, he's got lots of company.

In retrospect, should the state have held its nose and signed off on the Penn National/Bader deal? The way history is trending, it's now looking like New Jersey cut off aforesaid nose to spite civic face. But it seemed like a good idea at the time: If Penn thought it could recoup $800 million-plus from reselling 75%-80% of Bader Field, legislators had reason to believe Atlantic City was getting lowballed.

New man at the Trop

Wed, 21 Jan 2009 15:04:00 -0700

Last Sunday's Las Vegas Review-Journal carried an interview with new Tropicana Las Vegas President Ron Thacker. It delicately sidesteps potentially uncomfortable questions about the plug-pulling on Folies Bergere or the brevity of Thacker's tenure at Fontainebleau. His fondness for Who Moved My Cheese? earned him some reader derision. I found it a refreshing change from those execs who routinely cite Thomas Friedman's The World is Flat (presumably in search of clues on how to outsource the casino industry to Bangalore).

Thacker is a third-generation casino manager and a well-traveled operator. This should stand both him and the Trop in good stead after the clownish bumbling of hapless Columbia Sussex. He also evinces a longstanding affection for the property, which is a quality any executive there ought to possess. So that's another point in Thacker's favor and he's right that nostalgia is the main selling point down there. With the exception of parts of the Sahara, there's no property that says "old Vegas" (in a Rat Pack sense) quite like the Trop.

But when he says, "We're going to put some money back into the property with the infrastructure itself. Bring it up to the standards our customers expect and our employees expect," you have to wonder if he's read Tropicana Entertainment CEO Scott Butera's business plan. It earmarks $8.4 million for renovations and maintenance this year (that'll get you 1/30th of thrifty Eastside Cannery and about an 80th of Aliante Station) and an average of $5.2 million for each year afterward.

That's not much more than is set aside for MontBleu, up in Lake Tahoe and a small fraction of what Butera proposes to spend on the Tropicana Atlantic City. Then again, in order to do the latter, he'd have to persuade the New Jersey Casino Control Commission to let him have it back and ... well ... you know.

Meet the new boss, same as the old boss

Fri, 16 Jan 2009 18:17:00 -0700

When I wrote yesterday that the spirit of Bill Yung still seemed to be afoot at the Tropicana Las Vegas, I didn't know the half of it. Mike Weatherford has the skinny on the shuttering of Folies Bergere and it boils down to a payroll dump. Folies performers were Trop employees and Raw Talent Live or whatever show with whom Trop President Ron Thacker is dickering would 'four-wall' the Tiffany Theater, placing Thacker in the role of landlord: collecting the rent and doing maintenance as needed.

Combine this with projected capex spending of about $6 million a year (some of which may be coming from money budgeted for Folies) for the next five years -- at a time when the Trop is falling further and further behind the competition -- and a prolonged Scott Butera regime is beginning to look like a bleak prospect. Here's hoping the bankruptcy court clears the way for an asset sale and soon. What the Trop needs is someone who can do a reverse-Yung: Buy it at a depressed price and use the money thereby saved to spruce the old gal up or, better yet, do a partial tear-down-and-rebuild job on her.

You came to Nevada but it was closed. Not surprisingly, Gov. Jim Gibbons' new budget would balance the ledger by socking it to visitors and literally stealing from the indigent. As for casinos that haven't collected on dishonored markers -- too bad. Gibbons wants them to pay taxes on the duff debts forthwith. If all that doesn't work, Midnight Jim could take a cue from Circuit City and hold a 'going out of business' sale. Speaking of which ...

Progressive Gaming, R.I.P.: The phone is off the hook and the vultures are circling Progressive's corporate HQ. It appears that Progressive's debts will be settled, to some extent, by holding a fire sale of its best intellectual property to "a major slot machine manufacturer." Could it be minority owner IGT? Naaaaaaaaaaaaaaah!

In a sidebar, it's reported that Black Gaming has one month to avoid defaulting on nearly $200 million in debt. It appears that CEO Randy Black Sr. was so busy shoveling money into his own pockets that he missed an interest payment yesterday. Say what you will about Black, he's definitely got his priorities. The "unbundling" of the Strip shows every sign of trickling down to markets like Primm and Mesquite, where Black has enjoyed a near-monopoly for most of the past decade (Mesquite, not Primm).

Prospective buyers could include guys like Stephen Siegel. Snicker if you like at his plan to create "synergy" between the Gold Spike downtown, the obscure Barcelona and the Mt. Charleston Hotel. But Siegel Group Nevada has been quietly rolling up a sizeable bundle of assets, has a reputation for reinvestment and, as I've said before, has done more with the Gold Spike than Tamares Group ever did with it or any of Tamares' other Downtown properties. It also sounds like Siegel's got a knack for marketing, itself no small asset in this economy.

Harrah's LV renews Rita Rudner's contract ... signaling the Apocalypse?

Buyers' remorse

Fri, 16 Jan 2009 15:36:00 -0700

Even if hotelier and Westin Casuarina (above) owner Columbia Sussex succeeds in extricating itself from Tropicana Entertainment, it's not out of the woods by a long chalk. It may have as little as nine months (or as many as 21) to pay off a $700 million loan -- or forfeit over a half-billion dollars' worth of hotel properties.

"Covenants are being triggered by those who have bought at high [long-term value] in 2006 and 2007," says Cedar Capital Partners veep Phil Golding, and Golding's time frame would coincide with the $3 billion-plus spending spree that netted ColSux CEO William J. Yung III not only Aztar Corp. but 14 Wyndham-flagged hotels when the seller's market was at its peak.

Judging by the tenor of the Property Week article, MGM Mirage also found an exquisitely inauspicious time to try and semi-reinvent itself as pure hotel operator (albeit so far only for the China and Dubai markets).

Case Bets: Chicago, Wyndham, Harrah's

Fri, 16 Jan 2009 12:37:00 -0700

Anybody who still frets about "criminal elements" in Las Vegas casinos ought to turn their gaze toward Chicago instead, where such issues continue to dog the state's 10th casino license. The citizens of Waukegan lost their shot at a casino because the would-be owners had juiced an indicted businessman into the deal, despite representations to the contrary.

And the winner is ... Des Plaines.

Also, the amounts of the various bids have been revised. Favorite son Neil Bluhm's winning offer was $272 million (quite a bit more than previously reported), while Waukegan Gaming brought up the rear with $216 million. Alex Yemenidjian's bid has been revised slightly downward, to a still eye-popping $406 million. Maybe Yemenidjian, who made one previous run at Tropicana Entertainment, ought to take that $406 million check to Scott Butera's office and ask for the Tropicana Las Vegas in return. And if were Butera, I'd have that check to the bank as fast as my legs could carry me.

Wyndham's latest Las Vegas project, just up the block from LVA HQ, has ground to either a halt or an extremely slow crawl. But Wyndham is going great guns in the Bahamas, where its Wyndham Nassau Resort & Crystal Palace Casino opened yesterday. Assuming Harrah's Entertainment can ever pull the trigger on a sale of The Rio, the latter has quite a bit of acreage (36.73 acres, to be pedantically precise) out back that's being underutilized as surface parking. Any prospective owner ought to consider cannibalizing that for additional casino/restaurant offerings, piggybacked onto the rear end of the existing Rio. It could synergize quite nicely with the Wyndham's timeshares, once they're eventually up and running just across the street, and capitalize on a steady stream of Twain Avenue traffic.

(Just for perspective, El Ad Properties only has clear title to 18.4 acres for its Plaza metaresort, although it may hold options on adjacent land; there's still $615 million in that acquisition that hasn't yet changed hands, judging from property records.)

Speaking of Harrah's, whether due to its new bean-counting ownership or a surfeit of other pressures, its media site has fallen into a state of semi-neglect. For instance, Harrah's southern Indiana casino hasn't been Caesars Indiana for some time now. The newly Caesar-ized Casino Windsor doesn't even merit a Web page of its own, nor do the oft-disrespected Imperial Palace and Bill's Gamblin' Hall on the Strip. The former Barbary Coast would have been a prime spot for reintroducing the Horseshoe brand to Las Vegas, but exploiting the power of the Horseshoe name is one of many ideas that have fallen victim to Harrah's ADD-afflicted corporate style in the post-Phil Satre era.

$376 million for the Trop?

Thu, 15 Jan 2009 15:01:00 -0700

Secured creditors of Tropicana Entertainment are being asked to take haircuts of 14-27%, as details continue to emerge of the company's reorganization proposal. The bigger shave would go to debtors of the company's 10 non-Vegas properties, the value of whose stake would be written down to $915 million.

Those who are owed money by the Tropicana Las Vegas (which would be spun off into a stand-alone TropEnt subsidiary) would reduce their claims to, if my calculations are correct, $376 million and change. Which means that, if CEO Scott Butera's #1 priority is to balance the ledger, a Strip property that stock and real estate analysts were valuing in the $1 billion-$1.2 billion range back in '06 might soon be had for less than $400 million -- or just over $11 million an acre.* How times change.

(* -- Obviously this does not take into as-though-redeveloped valuations, ongoing operating costs, EBITDA multiples, etc. But if MGM Mirage really is having trouble getting $1.2 billion for The Mirage in the present economy, then asking a third as much for the not-sought-after, rehabilitation-needing Trop seems quite plausible.)

Subordinated debtors, though, are being asked to take it in the shorts: Settle for less than $20 million of nearly $1 billion in debt. TropEnt's former CEO, William J. Yung III, may be going down but he continues to inflict collateral damage along the way.

Rogues' gallery

Thu, 15 Jan 2009 13:08:00 -0700

After a fitful start, blogorrhea is sweeping the business desk of the Las Vegas Review-Journal, resulting a veritable flood of news nuggets today ...

Planet Hollywood prexy Michael Mecca has resigned to pursue the proverbial "other opportunities" at a time when revenues have been up. On the next Vegas Gang, Jeff Simpson predicts -- with unassailable logic -- that Mecca is going over to Crown Ltd. to head up James Packer's North American gambling operations (in which case Mecca will have his work cut out for him, but congratulations all the same).

A less-charitable alternative theory would be that Mecca has been scapegoated by Planet Ho for having been in charge when it got dragged into the Omar Siddiqui scandal. (The indicted ex-Fry's Electronics exec lost $9 million there in one gambling session alone.) Planet Ho's lawsuit against Siddiqui got tossed last month.

"No more wire hangers!" Whatever the case, somebody leaked Siddiqui's player profile to the San José Mercury News and, geez, this "whale" sure is a whiny little bitch. (Sorry, I meant that to read, "a high-value, loyal customer and a good friend of our casino staff, who look forward to his every visit.")

Good news for visitors: The Nevada Department of Transportation is at least talking about widening I-15 south of Tropicana Ave. Whether NDOT can get the money from Gov. Jim "Scissorhands" Gibbons is another matter, but it can at least remind Midnight Jim that he himself identified California as Nevada's Numero Uno tourism priority in the course of disparaging Asian marketing as "a waste of taxpayer money."

And who knew that the Circus Circus RV park was the new "in" place to stay?

Randy Black, aka Mr. Thrift. Many of his employees are out of work, the former Si Redd's Oasis may be a hollow sepulchre these days and his Black Gaming has defaulted on debt. But we don't need to pass the hat for the self-aggrandizing Black Sr. quite yet.

Seeing financial havoc all around him, Black decided that austerity measures are for other people (like his employees) and awarded himself a nearly 4% raise for this year, escalating to 5% for each year afterwards. Whatever meagre EBITDA Black's Mesquite casinos achieve, 5% of that will be redirected into Black's pockets as a "management fee," on top of $21,200 in other goodies.

At a time when Nevadans from all walks are being asked, or sometimes told, to accept wage freezes and outright reductions, Black's greed is a disgrace to the state. R-J reporter Arnold Knightly is to be commended for keeping tabs on SEC filings and ferreting out not-so-niceties like this.

In other news ...

Folies Bergere: 49 is the new 50.

From showgirls to no-girls: What's Ron Thacker's first official act as president of the Tropicana Las Vegas? What else but shut down Folies Bergere well shy of its 50th anniversary? The no-frills spirit of Columbia Sussex remains, protestations to the contrary, clearly alive and well [sic] at the Trop.

Thacker's press release made noises implying that the Trop had a replacement for Folies waiting in the wings but, when pressed by Norm(!) Clarke, a Trop flack could only weakly respond that it was "exploring options" and was "definitely not closing up shop." (The Trop gave the Las Vegas Sun a different, more definitive story, saying it does have a new show en route.) Unspecified property improvements are also promised. Pardon my skepticism, but we've heard that before -- and are still waiting.

Geez, first Titanic and Bodies take a hike over to Luxor (where they're doing even bigger business). Now this. Since it's a just a wee bit too cold for swimming right now, is there any reason left to visit the Tropicana? Bueller ... Bueller?

Harmon blame game: It looks as though the truncation of The Harmon into a 25-story stump is ultimately the fault of the same people who overlooked scofflaw remodeling jobs at sundry Harrah's Entertainment properties: Clark County's ever-(not)-vigilant building inspectors. "What? Fifteen floors of deficient rebar you say? Gosh, I guess I missed it. My bad. When's lunch?"

The Las Vegas Sun's story comes with a helpful graphic that shows how Perini Building Co. and its subcontractors ineptly installed and then further compromised the rebar that ultimately turned the (would-have-been) 49-story Harmon into what we might call The Half Harmon. In the accompanying video, Clark County's Ron Lynn threatens the culprits with a "potential disciplinary hearing." Oh, they must be quaking in their boots.

Peppermill exec in line for state job. No, not the beloved Peppermill restaurant on the Strip but rather Reno's Peppermill Resort Casino. Director of Marketing Kim Stoll is one of six finalists for the job of Nevada's tourism czar. Not making the cut was underqualified Gibbons crony Kirk Montero. Then again, Gibbons wants to eliminate the selfsame job that he tried to gift-wrap for Montero, so maybe the also-rans in this competition are its real winners.

Trop afterthought

Wed, 14 Jan 2009 14:59:00 -0700

That poor Tropicana Las Vegas, you could say the whole place is an afterthought these days. The old gal sure deserves better than what she's seen of late. Anyway ...

Seeing how CEO Scott Butera's business plan makes minimal provision for reinvesting in the LV Trop and the first iteration of his reorganization plan spins it off into a separate entity, it sure looks like they're shopping the place, doesn't it? Too bad that Penn National has already turned up its nose at the Trop. MGM Mirage even snubbed it by saying a Trop acquisition hadn't been considered -- not "decided against," not "not discussed," but beneath consideration. Owww! Is that any way to treat a lady of a certain age?

It'd be one of the all-time "fixer upper" acquisitions and with so many more-state-of-the-art, sexier Strip resorts potentially up for grabs (including the eternally available Rio), the market would appear to be saying, "Not now." If Butera could get even $500 million for it this year, I'd be gobsmacked.

"No more Bill Yung, honest." With Butera having earmarked more than half of his proposed $275 million reinvestment money for the Tropicana Atlantic City, he's making what has the distinct sound of a last-ditch plea to the New Jersey Casino Control Commission. As bad as things are in Atlantic City, there's not much Tropicana Entertainment without the A.C. Trop, so he's got to play this hand right down to the end. Once the Trop goes to the bankruptcy auction, Butera's out of the game.

From A(ztar) to Z(ilch)

Tue, 13 Jan 2009 16:05:00 -0700

If Tropicana Entertainment management's bankruptcy plan is accepted by the courts (one bond analyst thinks otherwise), former CEO/sole owner William J. Yung III will be left with -- what's the technical term? -- diddly squat. (So will his unsecured creditors, alas.)

Actually, he'll have less than nothing because he'll not only be forfeiting the remnants of his Aztar Corp. acquisition but also six TropEnt properties whose purchase predated the ill-starred Aztar buy. A portfolio cobbled together in bits and pieces over several years will be gone with the thwack of a gavel.

In which case, it will essentially close the book on The Worst Casino Acquisition of All Time, Bar None. Since Yung swung the Aztar deal by cross-collateralizing his motley fleet of casinos and riverboats, losing the Tropicana Atlantic City meant putting the whole kit 'n kaboodle up for grabs. Yung's dismissive attitude toward New Jersey casino regulations came with a $2.8 billion price tag.

Lighthouse Point: Last voyage departs soon.

I was going to write that no one in the casino industry will miss Yung, but he still owns the odd non-Trop casino, like the Westin Casuarina. So he's not going anywhere anytime soon.

The plan being for the secured creditors to roll their debt into TropEnt equity, one can see why CEO Scott Butera was at pains to complicate, stymie and/or outright thwart various asset sales initiated either by Yung or the New Jersey Casino Control Commission. As a Jan. 2, 2008 Morgan Joseph report pointed out, casino companies sell for higher cash flow multiples when peddled en masse, not piecemeal. For instance, Yung paid a whopping 11.3X EBITDA for Aztar, as compared to the 8.4X he plunked down for a Penn National castoff, the Belle of Baton Rouge.

So maybe Butera really thought he could land a higher price for Casino Aztar than Eldorado Resorts was offering or perhaps he just wanted to queer the deal that was on the table. Either way, the endgame was the same: more money. Since his plan hinges partly on regaining control of cash cow A.C. Trop and Casino Aztar, neither of which is a given (and one of which is exceptionally unlikely), TropEnt is still a long ways from being out of the woods.

Tropicana Las Vegas: Same this year, same next year, same in 2013.

Thinking positively, if Butera can't -- as seems inevitable -- get the Boardwalk property back, he can redirect money planned for Atlantic City upgrades into that eternally deferred Tropicana Las Vegas facelift. There's a case to be made, if not much of a case, for New Jersey to brush aside the $550 million offered by Cordish Co. for the A.C. Trop -- particularly if Butera were bound to the same conditions the Division of Gaming Enforcement recommended imposing on Yung 14 months ago: a one-year probationary license and a 26-point set of benchmarks.

But the Garden State is so revenue-parched that it's unimaginable it will tell Cordish to keep its money. And whatever tenuous faith the NJCCC might have in Butera won't necessarily be bolstered by his turnaround plan. The document makes some concrete promises (including $153 million in A.C. Trop upgrades), and its property- and market-growth projections are mostly conservative. For instance, Butera clearly harbors no illusions about the difficulties ahead in Baton Rouge, where Pinnacle Entertainment has a new riverboat coming over the horizon. God bless him, he's an optimist, though: Who else would postulate five straight years of single-digit revenue growth in Atlantic City?

But Butera's strategy posits revenue growth within the context of relatively flat operating and maintenance budgets. Some outright reductions, at least, can be attributed to the cessation of operations at Lighthouse Point in 2009 and Horizon Tahoe two years later. Were it not for that, Butera's numbers would look like something out of the Bill Yung playbook. In fact, certain of the promised reforms, like "Optimize [read: "tighten"] ... slot hold," centralized corporate purchasing and "utilizing third parties for certain services" are purest Yung. Others, such as a Nevada-wide loyalty-card program, appear to be new. (But why stop at Nevada?)

As for a reinvention of the Vegas Trop, don't expect anything before 2014, at the earliest. Likewise, the overdue replacement of Casino Aztar just isn't in the budget. It's a lean regimen for grim times, but give Butera this: He's not spending money he doesn't have and now the creditors to whom he is answerable will be literally invested in improving TropEnt's performance ... if they hope to see their money again.

A house divided

Wed, 07 Jan 2009 11:54:00 -0700

Give credit where it's due to the Las Vegas Review-Journal for today's interesting revelation that Columbia Sussex had been running the Las Vegas Tropicana with rival GMs overseeing the casino and hotel operations, respectively. This appears to confirm rumors I'd heard that ColSux likes to 'silo' the gambling and lodging aspects of its casino-hotels into separate profit centers which compete against each other instead of operating symbiotically.

With corporate thinking like that, it's no wonder that even Global Gaming Business Editor Roger Gros said, at G2E, that ColSux "didn't understand the [casino] industry." A newspaper interview with Casino Aztar interim skipper Tom Dingman details the decimation that took place there on ColSux's watch. Given how rundown the Casino Aztar infrastructure was when Dingman arrived, his ability to turn around business there is all the more impressive. Whoever succeeds Dingman shouldn't tinker with his business model, as it's proven to be an indisputable success.

Further down in the same assemblage of news briefs is the announcement of Brooke Dunn's New Years Eve resignation from Shuffle Master. The former Shuffle Master senior VP has been under a cloud ever since the SEC recommended civil prosecution against him for allegedly passing privileged information to an unrelated third party. Dunn's resignation was sadly inevitable, as he can neither fuufill his job responsibilities nor be entrusted with sensitive information as long as the SEC's accusations hang over his head.

Also out the door is the Ameristar Casinos Chief Accounting Officer Thomas Malone "who has resigned to pursue other opportunities," such as the opportunity of not having the doorknob hit you in the butt. Former Progressive Gaming CFO Heather Rollo replaces Malone. Given the performance of its casinos despite the recession, Ameristar has been unaccountably jittery of late, with Malone's abrupt departure being merely the latest tremor.

Update: Yet another executive who is choosing to "pursue other interests," like updating his resumé, is Tropicana Entertainment CFO Robert Kocienski. After a brief tenure in the job, he's been shown the door in favor of ex-Shuffle Master CFO Richard Baldwin, a long-tenured slot industry executive. Combine this with the hiring of Ron Thacker to run the LV Trop and it's one ex-Cosmopolitan executive in, one out. So I guess they can put that big Cosmo Class of '08 reunion on hold.

Plaza officially in trouble (or not)

Tue, 06 Jan 2009 12:18:00 -0700

It wasn't good news when El Ad Properties asked its bankers for a second extension on a $625 million purchase loan for what used to be the New Frontier. Now (by way of TheMarker, Reuters and Howard Stutz) comes a report* El Ad is seeking money from Sheldon Adelson. If you really are rattling your tin cup in Adelson's direction -- he who just diluted his ownership stake in Las Vegas Sands and stopped its leaks with $1 billion of his own capital -- then you are desperate indeed. For the record, El Ad's partner, IDB Development, says talks with Adelson are neither being considered nor on the agenda.

*Update: Reuters has all parties involved denying everything, so this is looking like one of those news reports that's more entertaining than true. At the very least, it provides clarity as to how this rumor got started.

It's not clear what to make of the appointment of Ron Thacker as president of the Las Vegas Tropicana. The reconstituted Tropicana Entertainment is starting to looking like a reunion of the old Cosmopolitan gang, as CEO Scott Butera leapt from that sinking ship, as did TropEnt CFO Robert Kocienski. On the other hand, Thacker made the trip from the Cosmo to the Trop via an interval spent as VP of casino operations for Fontainebleau Resorts "where he was responsible for casino design, development, systems implementation and general casino operations" for a casino that hasn't been finished, let alone opened. So is Thacker going through a rough patch in his career or is his departure an ominous portent for the Vegas Fontainebleau?

Next up: Gladiators, orgies & bear-baiting

Fri, 19 Dec 2008 16:21:00 -0700

"In Atlantic City, whose casinos saw revenue decline by 8 percent last month compared with the same period last year, the Tropicana staged its own version of Pamplona’s Running of the Bulls on Saturday — participants dressed as Santa Claus ran through the casino chasing scantily clad Hooters waitresses." -- If de facto Trop President Pam Popielarski is trying to make Columbia Sussex look good by comparison, she's off to what you might call a running start.

Case Bets: Stanley Ho in Vegas?, HRH grows but Morgans shrinks

Thu, 11 Dec 2008 13:47:00 -0700

A local columnist raises the spectre of Stanley Ho getting back-door access into Las Vegas via James Packer's acquisition of Cannery Resorts. This isn't the first time I've heard this question raised and, call me complacent, but I believe it stems from confusion. Namely, a conflation of Crown Ltd., the umbrella under which Packer's U.S. casino investments are huddled, and Melco Crown Entertainment, his joint venture with Lawrence Ho, son of dear old Stan.

While the Packer and Ho heirs do business together in Macao (and belatedly tried to get into Singapore), there hasn't been a whiff of Lawrence Ho being involved in Packer's U.S. ventures. (Obviously, because we're talking about discrete companies here.) Concern about Stanley Ho getting his mitts into Cannery are not only a stretch, but far more of one than the worries that were aired when MGM Mirage built a casino in Macao that was half-financed with money borrowed -- by Pansy Ho -- from the ancient casino vizier.

Doom, gloom in context. While the headlines are full of apocalyptic pronouncements on the subject of October's Nevada casino revenue decline, note where it says these numbers are the lowest "since April 2005." That was when the Las Vegas economy was on an upward trend that would make "bargain" and "Strip" virtually oxymoronic. So 2005's good numbers become 2008's panic-inducers ... of course, Las Vegas' ability to sustain its ensuing merge-n-splurge spree (and the ensuing Excedrin headache of ebt) on 2005-level revenues is a whole 'nother story.

April '05 would postdate the point in our economy where Americans started saving money at a negative rate and living off credit. At the time (i.e., March of that year), then-Council of Economic Advisers Chairman Ben Bernanke said, as recounted in the Dec. 1, 2008 issue of The New Yorker, "the main source of imbalance in the global economy was not excess spending at home but, rather, excess saving in China ... "

Darn those party-pooping Chinese! Everything would be just ducky if it weren't for them! But seriously, folks ...

Hindsight being 20/20, this was probably the point where the casino industry ought to have recognized that the U.S. economy (goaded by three-plus years of easy-money policies at the Federal Reserve) was on an unsustainable course and started curbing its growth projections -- and development plans. Instead, it stomped on the gas pedal and we got (in no particular order) leveraged buyouts of Station Casinos and Harrah's Entertainment, crazy land inflation on the Strip -- peaking at over $40 million/acre, CityCenter, Echelon, Palazzo, Viva, umpteen failed or undersold condo projects, bankruptcy at Tropicana Entertainment and the Cosmopolitan, potential bankruptcy at Herbst Gaming and Isle of Capri, and now a loud screeching sound as the brakes are belatedly applied.

Morgans' Faustian pact. What doth it profit Morgans Hotel Group to acquire the Hard Rock Hotel & Casino only to sell it back to the bank in little bits and pieces? Morgans' stake in the exponentially expanding HRH barely exceeds 14% and is on track to get smaller still. Some of us thought from the start that Morgans had bitten more than it could chew. Or, to look at it another way, what a long, strange trip Morgans has taken to wind up with a glorified management contract.

Chrysler cars getting worse? Yup, it looks like another triumph for private equity buyouts.

Palace more 'impotent' than ever

Wed, 26 Nov 2008 12:51:00 -0700

More nails are being pounded into the coffin of the Imperial Palace. The official word is that eateries The Ming and Cockeyed Clam are closed for good. As for the others, operating hours are being truncated "periodically. Nothing is written in stone." Not even the future of "Impotent Palace," it seems.

G2E attendees taking the monorail north to the Las Vegas Convention Center were treated to the daily spectacle of Harrah's Entertainment demolishing the last of the apartment buildings that sat on the acreage it's accumlated between Audrie and Koval lanes. Now it's nothing but magnificent desolation, save for some fugly, little, white apartment shoeboxes owned by holdout Oscar Nuñez, and Columbia Sussex's Westin Casuarina.

ColSux up to old tricks. The Kentucky-based hotel/casino operator is embroiled in a contract fight in Baltimore that bears a striking resemblance to the long-running stalemate that took place at the Las Vegas Tropicana. (A conflict that was resolved in swift and statesmanlike fashion by Tropicana Entertainment CEO Scott Butera.)

The Trop's Culinary Union employees had it easy -- ColSux's Sheraton Baltimore City Center workforce has been in a two-year standoff. Bill Yung's minions are dangling a princely $728/year raise -- which they propose to offset with a "moderate" increase in health-benefit costs. So don't go out and spend those 728 clams (before taxes) in one place, guys!

Taking a page from the Obama campaign, Unite-Here has upped the ante by enlisting student activists as foot soldiers in its war with ColSux. Hmmmm. Makes you wonder if the Culinary Union should have tried that tactic at the Trop.

Sally Rand has left the building

Wed, 26 Nov 2008 11:50:00 -0700

That corpse you may have stumbled across while strolling the riverbanks of Pittsburgh is Pennsylvania's 'one and one-third' rule. It was a legislative fig leaf whose ostensible purpose was to prevent the prime casino/racino opportunities in the state from being gobbled up by a couple of operators. It's what helped doom Harrah's Entertainment's bid for a Pittsburgh casino, as few seemed willing to believe Harrah's was merely the minority investor/advisor it said it was. (Since Harrah's was already the owner of a racino in Chester, Pa., that scotched its chances for more than a 33% share of anything else.)

So Pittsburghers got Don Barden instead. Didn't work out too well. (Then again, who could have predicted Harrah's would be in the parlous financial health from which it currently suffers?)

Anyway, earlier this month, Pennsylvania's Gaming Control Board bowed to the inevitable and transferred the Pittsburgh license to developer Neil Bluhm, owner of the as-yet-unbuilt SugarHouse Casino in Philadelphia. Which means that the Pittsburgh project will actually get done now. But ...

Although Bluhm technically holds only a small stake in the soon-to-be Rivers Casino, the license is in his name. And a Bluhm-controlled entity, Walton Street Capital, is one of the major stakeholders. And the CEO of the project is Greg Carlin, who also just so happens to be CEO of SugarHouse. (Lest it be unclear, in my opinon -- not that it matters -- Bluhm has an admirable track record as a developer and is the sort of corporate citizen the casino industry needs.)

So let's call out the 1.33 rule for the fiction it has become. If the PGCB isn't going to enforce it in other than the most cosmetic fashion, the Pennsylvania Lege should repeal it. This fan dance isn't fooling anyone.

Speaking of Neil Bluhm, he and Greg Carlin have turned up in Illinois, where they're amongst the bidders for the state's 10th and final casino license. The deleterious financial effects of the Illinois smoking ban and the state's staggering tax rates on casinos have scared off all but a trio of no-name outfits: Bluhm's Midwest Gaming & Entertainment, Waukegan Gaming and Trilliant Gaming, steered by the Flying Dutchman of the casino industry, Alex Yemenidjian.

The former MGM Mirage and film-studio exec tried to jimmy his way back into Vegas this year, asking a federal bankruptcy court to force Tropicana Entertainment to accept a loan from a Canadian firm with which Yemenidjian had become affiliated. Bluhm, whose base of operations is Chicago, might have a "home field advantage," but he's crying foul over Yemenidjian's opening gambit. The erstwhile casino executive is plunking down a whopping $435 million to, in effect, buy that 10th license. Crass? Yes. Persuasive? Undoubtedly.

Bluhm, by contrast, is offering only $100 million upfront, followed by a series of conditional $10/year payments. Waukegan Gaming effectively splits the difference, bidding $225 million for the license. If Yemenidjian is going to throw $435 million at the license alone, that raises the question of whether he's robbing Peter to pay Paul: i.e., Will commensurate capital be available to build the casino? (Magic 8 Ball says, "In this economy?!?")

Help the Neon Museum. All it takes is two clicks of your mouse. Just go to Hampton Inns' Nevada Landmarks page and click on the "Vote for this Landmark" link for the Neon Museum (or the Nevada Northern Railway Museum or Carson City's Children's Museum of Northern Nevada, if you're so inclined). The winner of the plebiscite will receive a donation from Hampton Inns at year's end. Thank you, Hampton. You're a class act.

Case Bets: Hooters; Defection at Borgata; Yung vs. Butera

Tue, 25 Nov 2008 14:56:00 -0700

"All of the economists who gave us information predict 2007 is going to be a year where the economy slows throughout the country and Nevada. Then we will see a pickup in 2008-09." — Deborah Pierce, CFO, Hooters Hotel, Las Vegas, November 2006

With prognositication like that, no wonder Hooters has consistently fallen short of expectations.

Mullin mulls Oz offer. Shortly after he had to pink-slip several hundred employees, Borgata COO Larry Mullin relieved himself of duty. He's not falling on his sword but moving to greener pastures instead, becoming CEO of the casino division of Australian gambling firm Tabcorp. Which means he'll have four casinos to operate, not just one. Boyd Gaming's Bob Boughner, left twiddling his thumbs after Echelon's plug was temporarily pulled, will fill in at Borgata. Congratulations to Mr. Mullin on his new opportunity.

Leap of faith. Sure enough, it looks like any hopes Tropicana Entertainment CEO Scott Butera had of getting back into the good graces of the New Jersey Casino Control Commission took a massive hit below the waterline. They were torpedoed when Columbia Sussex CEO William J. Yung III unexpectedly paid a visit.

Why U-Boat Yung surfaced at the New Jersey Supreme Court hearing and where the heck Butera was is a good question -- as is how Butera managed to get blindsided by this PR disaster. Does Yung still fancy himself the string-puller at TropEnt? Was he trying to stick it to Butera somehow? Or was this merely another example of Yung's professed -- and sometimes demonstrable -- cluelessness about virtually everything on Planet Earth, up to and including documents he signs.

In any event, the sole shareholder of the company Butera ostensibly controls just trampled him like a rogue elephant. The odd Yung-Butera dynamic suggests conjoined twins who aren't on speaking terms but can't be surgically separated either.

If the NJCCC can somehow ignore the Yungian elephant in the middle of the room, there's a good argument to be made for letting Team Butera have a crack at the Atlantic City Tropicana ... especially after a state-appointed trustee left hundreds of millions on the table in a bungled sale of the property. But that's a mighty big "if" and the NJCCC probably hasn't the faith sufficient to make that leap.

Quote of the Day

Sat, 22 Nov 2008 17:33:00 -0700

"If they don't [know how], it strikes me that they lack sufficient business judgment to be in the industry in the first place." -- New Jersey Supreme Court Justice Roberto Rivera-Soto on Columbia Sussex's inability to form an independent audit committee -- or to grasp the importance of doing so -- at the Tropicana Casino & Resort in Atlantic City.

Atlantic City Death Watch II; Banquo's Ghost

Sat, 22 Nov 2008 16:25:00 -0700

Wow, I never thought we'd have our second installment so hard upon the first. But no sooner had S&G ticketed Resorts Atlantic City for a visit to Intensive Care comes word that it's going to miss a $10 million loan for which the casino-hotel itself is collateral. Could we actually see a casino shutdown before year's end?

Don't ask Colony Capital spokesman [sic] Owen Blicksilver, possessor of the World's Cushiest Job. Contacted by a reporter, Blicksilver did what he always does: "declined comment." Colony could conserve some much-needed capital if it'd replace Blicksilver with a tape loop that just utters, "No comment ... No comment ... No comment" anytime the phone rings.

The long-suffering Tropicana has had to make layoffs, its first of the year. And while its license denial was being litigated before the New Jersey Supreme Court, who should turn up like Banquo's Ghost (and every bit as welcome, I suspect) but Columbia Sussex CEO William J. Yung III. Irrevocable proxy or no, Yung still hovers far too close to Tropicana Entertainment for comfort. And TropEnt's recent spate of public statements have not come from CEO Scott Butera but from a PR agency on Yung's payroll. So much for the 'new, independent' TropEnt.

Butera's big goof. Meanwhile, the long-postponed Casino Aztar sale has definitively gone down the toilet. Butera had a deal in place but elected to renege, on the assumption he could get a better offer elsewhere. He received, in fact, zero offers. While he vacillated, credit markets went south and Eldorado Resorts' purchase loan rocketed from an 8% interest rate to a 19% one. Ouch!

So it's entirely possible that, even though it just received its Indiana gaming license, Eldorado would have found Casino Aztar too rich for its blood and bailed anyway. But had Butera and TropEnt's creditors stayed on the sidelines instead of booting the ball around, Eldorado would have had to face the state's wrath alone. Now it looks very much like TropEnt's grass-is-greener mentality helped scotch the deal, meaning Butera can queue up for a share of the blame, too. Evansville, Ind.'s mayor, Jonathan Weinzapfel didn't miss the opportunity to remind people that the casino has been doing better since TropEnt management was evicted last spring.

Our long Vegas nightmare is (temporarily) over. Tonight marks the last performance at The Mirage given by Danny F. Gans, whose giant, grinning visage (and even larger pair of biceps) dominates the Strip. Gans will return, sometime in the new year, in what used to be the Spamalot/Avenue Q theater at Wynn Las Vegas/Encore.

We hope he's able to use the slacktime to get some much-needed rest and recuperation from his grueling four-show-a-week regimen, which would have been the death of many a lesser performer. But not the redoubtable Gans. Nothing short of a five-day work week can stop him. Maybe he can even employ his sabbatical to conjure up impersonations of celebrities who postdate George Burns and H. Ross Perot.

Atlantic City Death Watch

Fri, 21 Nov 2008 17:38:00 -0700

New Jersey's Casino Control Commission has come out with a grim set of numbers regarding gross operating profitability in Atlantic City's casinos during 3Q08. And, as bad as these numbers sound, once the cost of operation is subtracted, a $121 million collective net profit in 3Q07 dissolves into a an aggregate loss of $78.5 million (a -$199 million swing, year/year).

If, to borrow a phrase from Chuck Monster, "flat" is the new "up," there's one clear winner in this bunch, a clutch of casinos that are doing about as well as could be hoped, a few that are cause for concern, and two that need to be rushed to Intensive Care. Without further ado ...

1. Harrah's Resort Atlantic City: -2% ($52M profit)

2. Trump Taj Mahal Casino Resort: -13.6% ($35M)

3. Trump Plaza Hotel Casino: -15% ($17M)

4. Borgata Hotel Casino & Spa: -17% ($61M)

5. Bally's Atlantic City: -19% ($43.5M)

6. Caesars Atlantic City: -22% ($49M)

7. Showboat Hotel Casino: -35% ($24M)

8. Tropicana Casino & Resort: -43% ($22M)

9. Trump Marina Hotel Casino: -36% ($7.6M)

10. Resorts Atlantic City: -62% ($3M)

11. Atlantic City Hilton Casino Resort: -73% ($3M)

The argument could be made that Trump Plaza and the Taj were low on the food chain already and had less room to fall. But that could also be said of Trump Marina and Colony Capital's two bottom-tier properties, not to mention the ailing Trop. The fact that Trump is maintaining its margins relatively well (except at the discarded Marina) also supports CEO Mark Juliano's contention that he's operating as thriftily as possible already.

With Station Casinos losing money, Colony can't look elsewhere in its casino portfolio for cash with which to prop up the Hilton and Resorts. Will they still be around when Revel opens? For the sake of their employees, I hope so. But it's not looking good.

Butera up to old tricks; Dog days for Ruffin; Fowl play

Mon, 17 Nov 2008 18:07:00 -0700

Grasping at straws in his attempt to wrest control of the Tropicana Casino & Resort back from the New Jersey Casino Control Commission, the CEO of Tropicana Entertainment, Scott Butera, has seized upon a letter from state Sen. Richard Codey. In his Nov. 14, 2007 missive, Codey requests that Unite-Here Local 54 be allowed to intervene in NJCCC hearings against TropEnt owner Columbia Sussex (which, back home, was the beneficiary of some rare -- but no doubt welcome -- good news).

Codey's letter, Butera's lawyers contend, smacks of "political interference" and tipped the scales of justice against ColSux.

But Local 54 was only allowed to make a statement toward the proceedings' end, not be an active participant, as Codey wished. ColSux lawyer Paul O'Gara was given the opportunity to object to this at the time -- and didn't. TropEnt also revives the old Bill Yung whine that it doesn't understand what New Jersey law means when it requires every casino to have an independent audit committee.

Let's see ... Independent. Audit. Committee. Not a difficult concept to grasp, save possibly for ColSux, which ultimately formed a committee of one, that one person being a lawyer it already had on retainer (which shoots the "independent" requirement right in the ass). Sounds like the New Jersey Supreme Court isn't buying it, either.

Those must have been some NJCCC hearings, too. According to The Associated Press, they "presented evidence of roach and bedbug infestation in hotel rooms, floors and appliances caked with mud and dust, and long waits for slot jackpot payouts following massive job cuts ..."

Is that what Bill Yung meant about his being "ahead of the curve"?

Phil Ruffin is back in the news. Like other dog track owners -- and the State of Kansas -- he's in a financial bind. He contends it's not a viable economic proposition to run races at this two Kansas tracks. Ergo, he'd like his cut of the dog-running revenues upped to 58% from the current 40%. But a cash-strapped Kansas Lege may not want to dicker -- or, worse yet, Topeka-bound lawmakers may see this as opportunity to repeal Kansas' casino law. That alarming prospect alone should make gambling advocates wary of Ruffin's proposition, even if you don't think dog racing should be abolished.

Poultry in motion. In "I hate G2E," I sang the praises of the tic-tac-toe-playing rooster, late of Atlantic City. Seems he was furloughed a while back from the A.C. Trop (no, Bill Yung didn't fire the chicken). But Harrah's Entertainment was astute enough to snap up our feathered friend and install him at Tunica's Sheraton Casino Hotel. According to Raving Consulting, Harrah's staked $100K and sent out a "Chick Tac Dough" mailer, inviting all comers to try their luck against the mojo-bearing bird in the "Final Chicken Challenge."

No sightings of the rooster at G2E, though. I'll keep you posted.

I hate G2E

Fri, 14 Nov 2008 11:35:00 -0700

Allow me to clarify.

The annual Global Gaming Expo is a great and good thing, bringing together industry members, vendors and academics from the four corners of the globe. You see the newest -- and oftimes the strangest -- products on offer. Many are all the more tantalizing for not having received regulatory approval -- placing them tantalizingly out of reach. I'll confess to a childlike fondness for the huge table game with the dome under which plastic horsies go 'round and 'round in a sort of mock Kentucky Derby. Silly, yes, and an absolutely pointless wager, but G2E doesn't stint on oddball entertainment value.

The sheer amount of brainpower that is directed into that outwardly frivolous activity known as "gambling" is an awesome sight to behold, especially when crammed into the Las Vegas Convention Center.

The conference tracks are an embarrassment of riches (especially when a speaker makes a particularly egregious faux pas). It's Sophie's Choice to the fourth power to have to select between panels sometimes. Heck, most times. And if there are any detractors of Native American casinos out there, if you subtracted the tribal attendance from G2E and many other industry conferences, they'd either be A) much smaller, B) ghost towns or C) defunct.

Then there's the yearly "State of the Industry" panel, which more recently has been "The Gary & Terry Show," with American Gaming Association President Frank J. Fahrenkopf serving questions to Harrah's Entertainment CEO Gary Loveman and MGM Mirage CEO J. Terrence Lanni. Except that Lanni canceled his 2008 appearance a short while back -- a harbinger of his resignation? IGT CEO T.J. Matthews will also be there, which should be, uh, interesting, especially with Loveman having launched a pogrom against "Wheel of Fortune" and other participation games.

However, there will be "added value" in the form of Ernest Stevens Jr., the Fahrenkopf of tribal gaming, taking his rightful place amidst the panel -- another sign that we've moved past the days when companies like Circus Circus Enterprises actively tried to suppress tribal gaming in neighboring states. (Speaking of Fahrenkopf, he had a cameo in this week's Frontline biography of GOP dirty trickster Lee Atwater, the man who brought you Willie Horton. It included a scene of Atwater spewing bile while Fahrenkopf stood at his left elbow. Whaddya wanna bet FJF wishes he could "disappear" that footage.)

Loveman gets all huffy if you challenge him about stuff (like why he lives in Massachusetts), so that can add to the fun. He's also very difficult to understand sometimes, because he's got the strange habit of swiveling his head constantly from left to right while answering questions, meaning that the microphone ... catches ... roughly ... every ... other ... word.

And yet ...

G2E is an ordeal. It's the Bataan Death March of the casino industry, as we haul ourselves from one end of the exhibit floor (which seems to extend beyond the curvature of the Earth) and back again, then repeat the exercise. Noise, crowds and the relentless pounding of one's feet on thinly-covered cement; it all takes a toll, especially for someone like myself who suffers from the triple whammy of fibromyalgia, osteoarthritis and recurring back trouble. The reams of paperwork one has to plough through beforehand can also drive you to despair.

In short, G2E is not for the faint of heart nor the frail of constitution. With that in mind, I offer 10 survival tips.

• The F&B Pavilion is your friend. Make liberal use of it, especially any free booze you can snag.

• The most important booth is not IGT's but rather the one where they sell the massaging insoles. I bought a pair last year and they were life savers.

• Chair massages. 'Nuff said.

• Sit down. As often as possible. You may not want to get up again, but duty calls.

• Cell phones. Set them on LOUD (as in jet-engine loud). In G2E, no one can hear your phone ring.

• Tchotchkes. The fewer you pick up, the better. The same goes for goodie bags. They'll just weigh you down and make your job harder. Travel light. Except for ...

• Business cards. Pack as many as you think you'll need. Then double it. At minimum.

• Downloadable slots. First, see if you can spot them (last year's bunch were indescribably bland). Then have a drink for every time somebody tells you they're "one year away" from deployment. Sort of like handheld gambling devices. (Remember them? They were The Next Big Thing ... three years ago.) For extra fun, use the term "vaporware" around the Cantor Gaming booth and see what kind of looks you draw.

• Don't play the slots unless you can get a sales rep to set them so they immediately trigger a bonus round. Otherwise you can waste a lot of time. Why they're not set to the bonus round as a matter of course remains a mystery.

• Fowl play. Remember the tic-tac-toe-playing chicken from Atlantic City? See if he has a booth this year. Then try to beat him. If you can, you're a true Master of the Universe 'cause that chicken's got game.

Get buzzed at the Trop. LVA just conducted a poll on casino smells, particularly the sort of piped-in aromas you'll encounter at The Palazzo. Which prompted a reader to ask, "So…… That moldy marijuana smell at the Tropicana is pumped in????? Interesting……"

Well, it'd be one way to get people to want to eat at that buffet.

Aztar sale flops

Fri, 07 Nov 2008 15:25:00 -0700

Tropicana Entertainment President Scott Butera had a $225 million deal to sell Casino Aztar in hand. Not good enough, he said. Thus, a second round of bids was solicited. The grand total number of offers received: one.

This lays the groundwork for Butera to do what I think he's been meaning to do all along: Declare the lone bid inadequate (maybe even a "fire sale"), much like the previous Eldorado Resorts deal he's trying to vacate. The next step would be to petition the State of Indiana to be allowed to resume control of Casino Aztar.

Whether the state plays ball is another matter. Evansville's mayor, Jonathan Weinzapfel told WEHT-TV he "looks forward to a new owner." Maybe my English is rusty, but that sure sounds like he wants no part of TropEnt, even in its post-William J. Yung III incarnation. Having been singed aplenty ever since the Aztar Corp. sale went through, Weinzapfel's "once burned, twice shy" frostiness is quite understandable. Butera's persuasive skills are going to be tested in the weeks ahead.

Having also scuttled the sale of Horizon Vicksburg, Butera's plan is obviously to reconstitute TropEnt at full strength (including the Atlantic City Tropicana). Not only would this increase the potential for cross-marketing the merged Columbia Sussex/Aztar portfolio to consumers, it's undoubtedly crossed Butera's mind that TropEnt is a much better resale proposition if kept intact ... not peddled off piece by little piece, as Yung was doing.

Is Peter Carlino crazy?

Fri, 24 Oct 2008 13:43:00 -0700

Now I know that Penn National is all a-flush with cash these days and CEO Peter Carlino is probably feeling bullish. Still, in a recent visit to Vegas to assess possible casino acquisitions, he's alleged to have acted like he just fell off the turnip truck.

According to Steve Wynn -- in the course of scotching a rumor that he might buy up some MGM Mirage property -- Carlino made the company an offer for Bellagio. Carlino must think that J. Terrence Lanni is an awfully desperate man. Why else would MGM part with its most powerful revenue driver on the Strip, a casino that is regularly in Majestic Research's top three when it comes to game usage (over-simply, sheer preponderance of players)?

Carlino made news by publicly dissing the Tropicana as a potential buy, saying "There's better stuff" to be had. Agreed. But, unless Wynn either misheard or is making mischief, Carlino seems to have veered far off the other side of the road. There's definitely some low-hanging fruit out there: The Rio, Riviera (plus debt), Cosmopolitan (ditto), maybe even the Sahara. Why he thinks MGM would part with its most valuable asset beggars the imagination.

(Wynn's hypothesis that MGM might peddle its Atlantic City land and perhaps its half-share of Borgata makes far more sense, especially with the question of Pansy Ho's suitability still hanging fire in New Jersey. And Penn has shown interest in two other A.C. sites already.)

MGM spokesman Alan Feldman is cagey, though, keeping alive the prospect that Bellagio might be had (perhaps by someone with the initials K.K.) for the right price. But I've got to believe it would take an offer as exuberant as the one El-Ad Properties made for the New Frontier before MGM Mirage would pawn its crown jewel to a rival operator.

And don't forget Downtown: Carlino is welcome to buy out slothful Tamares Group any time he likes.

Butera to NJCCC: Your people are dopes

Thu, 23 Oct 2008 15:15:00 -0700

Tropicana Entertainment has formally petitioned the New Jersey Casino Control Commission for the return of its former Atlantic City casino. Oh, to be in the room when the arguments are thrashed out!

Short of conducting an exorcism of the spirit of Columbia Sussex CEO William J. Yung III, it's hard to see how the NJCCC will be able to bring itself to do a 180 on this matter. (Especially when TropEnt's publicity releases still flow from Yung's mouthpieces at Beacon Advisors.)

But if TropEnt can convincingly demonstrate both liquidity and independence, it's hard to argue against it. One might feel otherwise had Justice Gary Stein not made such a total clusterfuck of the attempted sale of the Trop. Heaven only knows if even the pallid Cordish Co. bid will still be on the table by the time the New Jersey Supreme Court gets around to adjudicating TropEnt's forcible ejection from the Garden State, which could take several months.

But CEO Scott Butera, whose scattergun public pronouncements are becoming a matter of routine, may have shot himself in (or very near) the foot this time. His petition's assertion that "it is imperative that competent professionals, experienced in casino operations, be brought to bear," perhaps unintentionally implies that Pam Popielarski and the current Trop management team are incompetent and inexperienced. Which, since they were appointed under the auspices of the NJCCC, probably isn't the best way to go about making friends and influencing regulators.

Butera's got a well-respected sidekick in the person of former NJCCC Chairman Bradford Smith. Maybe he ought to let Smith do the talking, at least in situations where a modicum of diplomacy is required.

Quote of the Day

Wed, 22 Oct 2008 12:55:00 -0700

"Tropicana Entertainment has become the junkyard dog of the casino industry. It appears that once it sinks its teeth into something, it isn't about to let go, even if casino regulators try to rip it away." -- lead from a Press of Atlantic City story about the company's wide-ranging political and legal offensive in New Jersey.

Smoke-filled room

Tue, 21 Oct 2008 14:30:00 -0700

Maybe all this fussin' and frettin' (some of it from yours truly) about casino smoking bans is masking the real issue: Casino expansion in the U.S. has finally hit the wall in the form of one big-ass recession. Five states are contemplating adding casinos this November and in all but one (Maine), it's expected to pass. If so, it'll take some brave souls to buck the headwinds that are pushing casino revenues down.

Gambling halls in Colorado just had another crummy month, with Central City down 26%, Black Hawk off 20% and Cripple Creek declining a "mere" 10%. Some of that is undoubtedly smoking-ban-related falloff, but the smoking issue is beclouding one's ability to see just how much of the decline is a recessionary side effect.

It's no easier to get a clear picture in Mississippi. There, you can still smoke 'em if you've got 'em, but casino revenues are also on the downward slope. The view here is fogged by Hurricane Gustav, which levied a double-digit whammy on the Biloxi-Gulfport market. But Biloxi Mayor A.J. Holloway -- who's been through good times and bad -- isn't going for the easy explanation. He tells the Clarion Ledger, "the real story here is the economy. It’s catching up on us. This is something I kind of anticipated. Las Vegas and Atlantic City have been seeing this for months, so it was just a matter of time before it reached us.” As a consequence, state and local officials are starting to talk in terms of diminished expectations.

As for Louisiana (-23%), it got thwacked twice over, thanks to both Gustav and his bro, Hurricane Ike. Ergo, the entire month's numbers have to be tossed out as an aberration, even the relatively modest 9% decline in Shreveport-Bossier City. ("Relatively modest" only if your yardstick is the -34% declivity suffered by Lake Charles' riverboats.)

Too bad for Pinnacle Entertainment, though: Its L'Auberge du Lac was starting to give Harrah's New Orleans tough competition for the #1 revenue-earning spot in the Pelican State -- only $1 million behind Harrah's in July.

Two of the four lowest-earning properties in the state were Tropicana Entertainment riverboats. CEO Scott Butera's got his work cut out for him. At least Butera's finally driven a stake through the heart of that 10,000-room grotesquerie that predecessor William J. Yung III proposed to build on the site of the Las Vegas Tropicana. Trop Ent needs to maximize what it's got, not chase after pipe dreams.

... or not

Fri, 10 Oct 2008 16:23:00 -0700

I've been informed that Tropicana Entertainment owner William J. Yung III has signed an irrevocable proxy and cannot vote his shares, no matter how many he owns. Nor he can he regain the reins of the company.

Whether that is enough to satisfy the New Jersey Casino Control Commission remains to be seen. From what I hear, the inarguable fact that TropEnt is in Chapter 11 may be its biggest obstacle to regaining a foothold in the Garden State.

If you're looking for luxury in downtown Las Vegas ...

... the El Cortez will soon be running with the "in" crowd. Who'da ever thunk it?

On the flip side, if you've been victimized by the Vegas economy, KLAS-TV has some useful information on what to do.

He's baaaaaaaaaack!

Fri, 10 Oct 2008 14:56:00 -0700

Score one for Columbia Sussex CEO William J. Yung III. The New Jersey Supreme Court will hear his appeal of the New Jersey Casino Control Commission's revocation of his license, even though a lower court booted it, 3-0. ColSux has been superseded by Tropicana Entertainment, but Yung was still calling the shots when the NJCCC kicked him out of the state. If the Supremes rule in ColSux/TropEnt's favor, there's nothing to stop* TropEnt owner Yung from retaking control of the company and rampaging back into the Garden State. What can we expect then? Oh, probably something like "mass layoffs, regulatory violations and unsanitary conditions ranging from bedbug-infested guest rooms to overflowing toilets."

*[Editor's note: Actually not. See next item.]

Trop this!

Thu, 09 Oct 2008 17:38:00 -0700

The fourth time's the charm -- at least if you're Justice Gary Stein, the tortoise-powered conservator of the Atlantic City Tropicana. Having prolonged the timeline for selling the mammoth hotel-casino three times already, he's asking the state for a fourth extension. He double-pinky swears that, if the New Jersey Casino Control Commission gives him until Nov. 12, he'll have deal with Cordish Co. signed, sealed and delivered. Honest Injun.

It's difficult to see that the NJCCC has any choice in this matter. Stein's playing chicken with them, considering that they have to vote on his request on Oct. 15, one day before his current deadline to get the deal done. The commissioners picked this nincompoop to handle the Trop sale, so responsibility for this latest delay redounds right back to the NJCCC. Besides, if you had Stein's cushy $650/hour gig, would you be in any hurry to wean yourself off the Garden State's teat?

Stein's slumbrous pace is only further aggravating Tropicana Entertainment CEO Scott Butera. He says the NJCCC should give his company a chance, since it's "essentially" a different entity now. That "essentially" is certain to be a sticking point, as it's a tacit admission that owner William J. Yung III is still lurking in the shadows. Unless TropEnt creditors wrest every last share of equity from Yung's purse, it's impossible to envision a scenario in which TropEnt gets its wish.

When I joked earlier that Butera had gone "off his meds," I didn't know the half of it. Now he's making off-the-wall remarks about "making an offer for an existing [Atlantic City] casino, or trying to build a new one."

Butera's remark would not be ridiculous on its face were TropEnt not in Chapter 11 and limping along with an emaciated cash flow, thanks to the loss of its most lucrative property (the A.C. Trop). Oh, and its flagship riverboat, Casino Aztar, is now being run by the State of Indiana. So Butera would have to sing a very sweet siren song to investors to get them to part with the kind of dough his plan requires. And even then, it's still a Yung-owned entity, so he's back to Square One with the Jersey regulators.

Let's put the build-a-new-casino idea aside for a moment, because it looks prohibitively expensive for a company as waterlogged as Butera's. Let's say he can scrape together the hundreds of millions it would require to buy somebody else's casino. (It's a stretch, but work with me.)

Perhaps he could go for one of the market's laggards, like Resorts Atlantic City or the Hilton. Both perform better than Trump Marina (market value: $316 million), so perhaps a deal could be swung for a half-billion or less.

Or maybe Harrah's Entertainment, which is getting hurt in Atlantic City by Harrah's Chester, in Pennsylvania, would like to lower its oceanside exposure. The Showboat would be the obvious candidate to pursue; it brings in the lowest daily average win of the four Harrah's properties and it uses a brand that Harrah's has effectively discontinued. But you're talking about a casino-hotel that (with a smaller facility) pulls in Trop-sized revenues. So if Butera really thinks the Trop is worth $950 million or more, what would the Showboat fetch?

If Butera is serious about being a buyer in Atlantic City and not just trying to make a nuisance of himself in order to wear down the NJCCC, he's getting into a bit of a bind. The higher the price he says the Trop ought to merit, the more it's going to cost him to get back onto the Boardwalk or into the Marina by buying from someone else. Is his strategy crazy or crazily brilliant? It's sure got me foxed.

Still more Trop follies

Fri, 03 Oct 2008 12:57:00 -0700

Just when I was ready to get behind Tropicana Entertainment CEO Scott Butera's quest to reclaim the company's eponymous Atlantic City casino, he goes off his meds, so to speak. He blustered that "Our creditors, our employees and our neighbors in Atlantic City cannot afford to have this marquee Atlantic City property purchased at a severely depressed price."

I'm sure the creditors are hopping mad about the sale price but I sorely doubt that the employees are losing any sleep over it. Most are probably happy to have the continuing uncertainty about the Trop's future heading toward a resolution. As for the "significant investments" that Butera is saying he'll make, that's bold talk from a company that's in Chapter 11 and doesn't have any high-yield properties. Or, to quote one of my Mom's favorite queries, "Using what for money?"

It's unclear upon what Butera's stated valuation of $950 million for the Trop is based. Unless perhaps he's going by the high-end bid made by a shadowy group of New York investors. That offer was a non-starter, predicated as it was on the buyers being approved sight unseen. Butera can say $700 million (of which only $450 million is in cash) is not "acceptable" until he's blue in the face, but that doesn't make the Trop inherently worth more. The market will tell him what it's worth and right now the market isn't feeling any too generous.

In Butera's defense, if Trump Marina -- with a hotel-room base 29% of the Trop's, a third of the convention space, 53% the number of slot machines and 44% the number of table games -- went for $316 million, one can see where Butera's $950 million figure might have justification. But the Marina sold before the credit market cratered. Which means that re-selling the Trop at some more seller-friendly juncture means an interregnum of indeterminate length.

Besides, as the Las Vegas Sun's Jeff Simpson pointed out during yesterday's "Vegas Gang" taping, no matter how much Butera tries to talk around it, TropEnt is still a wholly owned subsidiary of Columbia Sussex, a company whose name is mud in Atlantic City. New Jersey regulators aren't going to sign off on any deal that might allow William J. Yung III to sneak back into the Trop through a side door, metaphorically speaking.

Taking a chill pill. With the imposition of Atlantic City's smoking ban less than two weeks away, Mayor Scott Evans is amenable to a delay. Matters wouldn't have reached this juncture had the city council not felt goaded into levying a total ban by the casinos' snail-like compliance with the previous 75% cutback on smoking areas.

However, there's nothing like a recession to refocus one's priorities. Council members face an unenviable choice on this one, caught as they'll be between het-up constituents who have breathed as much secondhand smoke as they care to and the prospect of further casino-revenue declines -- and higher unemployment.

Lipstick on a pig

Tue, 30 Sep 2008 15:26:00 -0700

That's how Atlantic City Tropicana conservator Justice Gary Stein is trying to pass off a deal that continues to make a loud "Oink!" He's trying to spin the media that his $700 million agreement with Cordish Co. is really an $800 million purchase once you factor in a promised $100 million worth of renovations. (Does he have that in writing, mayhap?)

Having made his bed with Cordish, Stein finds himself having to lie in it. What looks like $700 million on the surface turns out to be $450 million in cash and $250 million in securities. And when people hear the term "securities" right now, they feel anything but secure. The alternative was an all-cash, $575 million offer -- this for a casino that was drawing bids in the $850 million-$950 million range a scant five months ago. Stein -- does it bear repeating? -- shredded those offers even as the market started to soften and now finds himself a seller in a buyer's market.

Right now my sympathies are with Tropicana Entertainment CEO Scott Butera, who has to maximize the value of the Trop in order to satisfy a host of creditors. Instead, he's seen Stein fritter that value away. And remember, since Columbia Sussex CEO William J. Yung III weaseled out of paying the fines imposed on him by the State of New Jersey by instructing in lordly fashion that they simply be deducted from the eventual sale price, that means Butera is looking at an increasingly meagre payday. His repeated cries of "fire sale" are sounding less and less like a catchy exaggeration and more like the ugly truth.

If Stein can't get a good price on the Trop, it's time for the New Jersey Casino Control Commission -- which appointed this Barney Fife to run the sale -- to seriously consider putting the property into Butera's hands and seeing if he can make a go of it. ColSux apparently couldn't have cared less if it drove the Trop's revenues straight into the ground (which it did), but with debtors' knives at his ribs, Butera has a considerably sharper incentive to make the Trop competitive again.

Hell may freeze over before Station Casinos puts the first shovel in the ground on its Inspirada project. Considering how saturated the locals-casino market in Las Vegas is, Station would be crazy to proceed at this time. But that's not stopping the company from trying to annex a 22% increase in the size of the project's footprint.

Never let it be said of Station that it was content to take an inch when there was a mile to be had. And, should the economy continue to go south or were Station to strangle on its LBO-related debt, the more real estate it has to flip, the better its chances of survival.

Case Bets: PR, Trump

Tue, 30 Sep 2008 11:49:00 -0700

Press releases are always manna on a slow news day but sometimes you get one (OK, many) that make you want to pull your hair. For instance, I received such a specimen late yesterday from an agency that shall remain nameless -- last name rhymes with "Coke" -- breathlessly informing me of a new restaurant at Luxor. There was all the usual, meaningless verbiage: "fun, high-energy vibe," "rock-n-roll flair," etc.

The kicker was the announcement that aforesaid restaurant would be "Exploding at Luxor in mid-September." And when did I get this super-urgent blast? That's right, September 29, the next-to-last day of the month; this Tail End Charlie goes right back there with the time that Tilman Fertitta didn't announce the grand opening of his Golden Nugget steakhouse until two weeks after the event. (P.S., The food was greasy, Tilman.)

As for all that "high-energy," "rock-n-roll" mierda, if I'm going to this place (called T&T), my intention is to enjoy my dinner at a pace and in an ambience that don't give me indigestion, not to shake my booty 'til I puke. If want to rock out, I'll go home and put on my ABBA at Wembley Arena DVD (if the climactic rendition of "Hole in Your Sole" doesn't get you moving, check your pulse). And when I want to eat ... I probably still won't go to T&T after this lame-ass promo.

One more thing: The press release also mentions that the Titanic exhibit, still anchored at the Tropicana, will be making port at Luxor "in 2009." Which could mean 14 weeks or 14 months. (Translation: Luxor has no idea.) But at least we know we shouldn't expect its trans-boulevard voyage to happen anytime soon.

Pleasant surprise. I was able to tag along for a tasting menu at DJT, in Trump International, which is subdued and even posher than it looks on the Web site (the restaurant, that is). At the moment, it's also the best-kept secret in Las Vegas, judging from the handful of diners on a Friday night. The recently repriced menu is quite affordable, depending on how closely you watch your budget: You could also find yourself dropping $75/person here without even trying.

The hotel lobby, too, is quite restrained by Vegas standards, although the superabundance of gold leaf, gold glass and onxy would scream "TRRRUUUUUUUUUUMMPPP!!!!!" even were his name not already writ large on the building. The main problem it faces boils down to three words: location, location, location. Unless your prime directive is to log considerable quality time at Fashion Show Mall (Trump's porte cochere is directly opposite Nordstrom's), you're a bit of a hike from anything else. And, if and when Elad Properties gets started on redeveloping the vacant land where the New Frontier once stood, you'll be on the backside of a construction site, too.

One doesn't normally equate the words "Trump" and "bargain play" but the hotel's saving grace may be its room rates. Our top-notch research team vetted a series of October-December dates and found Trump to be consistently competitive with -- and sometimes cheaper than -- Paris-Las Vegas. It's also less expensive, whether by $40 or $170, than Wynn Las Vegas. Then again, my hunch is that customers would probably pay the extra $40 for the cachet of staying at a Steve Wynn property and right on the Strip -- not to mention being at the front door of Fashion Show Mall rather than the back one.

$150 million

Thu, 25 Sep 2008 17:51:00 -0700

That's at least how much money was left on the table by Tropicana Atlantic City's state-appointed conservator, Justice Gary Stein, when he chucked out all the first-round bids last spring. One of the lower known offers at that time was Colony Capital's $850 million -- far more than the $700 million for which Stein has had to settle.

(It does, however, hit the benchmark set by UNLV's David G. Schwartz, who gets the Nostradamus Award for correctly predicting the eventual sale price.)

Never fear, said Stein when giving the thumbs-down to Colony and other bidders, there's a billion dollars to be had out there. Not only did Stein have visions of sugarplums and inflated Trop valuations dancing in his head, he'd also been exchanging some ex parte pillow talk with companies who led him to believe there were big bucks to be reaped by the state, if only he'd reopen the bidding.

If there was any doubt remaining that Stein was a damn fool -- and that the New Jersey Casino Control Commission, which appointed him, was following him through the looking glass -- it has now been erased. Stein had the opportunity to strike while the Trop iron was hot. Instead, he dithered and dithered, then dithered some more. All the while, Atlantic City casino revenues continued to trend downward, as did the Trop's market value.

Stein's eventual pick, Cordish Co., was one of the spurned first-round candidates and it's unclear how Cordish's initial offer compares to the new one. Even so, Cordish was the logical choice, especially with Trop-savvy executive (and former regulator) Dennis Gomes on board. In essence, Stein has spent a great deal of extra time and money to arrive at a result that could and should have been achieved months ago. If he's keeping the previous bids secret (and Cordish could still be outbid at bankruptcy court), it keeps some of the egg off his face.

Stein's salient accomplishment has been to fling the door wide open for Tropicana Entertainment CEO Scott Butera to try and throw a body block on the deal. He's right to call Stein's timing "odd," seeing as how the judge had three more weeks to wait for a better offer to materialize. He's dragged what was supposed to be an expeditious resale process out for nine months. What's three more weeks?

What's also odd, though, is that Butera hasn't submitted a petition for the reconveyance of the A.C. Trop that he says he wants. He'd better get on the stick, and faces a few obstacles. As he's pretty much acknowledged, Butera has to convince the NJCCC that TropEnt is now a William J. Yung III-free zone. Also, if the state were to reconey the Trop to Butera, it would have to forego the revenue that might be realized from the Cordish sale. There may not be much appetite for that.

Cordish, for its part, is talking about putting another $100 million-$200 million into the Trop. Butera's TropEnt is mortgaged to the topmost hair of its head and would be hard-pressed to match Cordish's proposed capital improvements.

Stein might have avoided this if he'd sold the Trop with dispatch at a time when TropEnt parent Columbia Sussex was in disarray. By taking the tortoise-powered course he did, Stein gave Butera time to reorganize and counterattack. If the NJCCC goes through a year of shopping around the Trop only to have a court hand it over to Butera, this time the fault will be entirely the commission's own.

What a complete frigging botch.

Kansas, Round 2: It's Cordish!

Fri, 19 Sep 2008 14:59:00 -0700

OK, I was wrong. Incredibly wrong. As you'll hear on the next Vegas Gang podcast, I stuck by my prediction that Kansas' largest casino contract, the one for the greater Kansas City area, would go to Mohegan Sun. Why? Biggest budget, most amenities, a track record of large-scale casino development. At least I covered my butt by saying that Cordish Cos.' piggybacking of their proposed casino onto the Kansas Speedway gave them "dark horse" status. Also, franchising the casino under the Hard Rock brand was not to be gainsaid.

A racino of a different stripe

So when the winner was announced today, Cordish was it. While Mohegan Sun was willing to put a bigger investment ($740 million vs. Cordish's $680 million) on the table, Cordish's synergy with the Speedway appears to have done the trick. They'll whip up a temporary casino (2K slots, 75 tables) sometime next year, to get the cash flowing while the full-scale project rolls toward a 2011 debut.

Here's the real shocker: Mohegan Sun got zero votes, primarily because state consultants projected its revenues as the lowest of the three proposals remaining on the table. (Pinnacle Entertainment and Las Vegas Sands has already withdrawn from the fray. With a major project underway outside St. Louis, plus others in holding patterns in Atlantic City and Baton Rouge, Pinnacle's chances seemed remote. It's difficult to imagine Kansas being willing to take a place at the back of that queue.)

Which means that three of the seven votes went to -- surprise! -- Golden Gaming, a company whose chances I will freely admit to having severely undersold. It says a lot for CEO Blake Sartini's reputation and for Golden's presentation that it came within an ace of winning, despite having a relatively modest track record -- at least nothing remotely approaching the $662 million casino it proposed to build. With Penn National having sulked its way clear out of Cherokee County and the Kansas lottery board starting to display skepticism toward the Ford County bidders, Golden has at least one, maybe two more opportunities it could pursue in the Sunflower State.

Ten months ago, at the time its casino empire was starting to collapse, Columbia Sussex announced that it had sold the Horizon Vicksburg to casino investor Nevada Gold for $35 million. Seems now that it's yet another William J. Yung III transaction that's (pardon the pun) gone south, following the cancellation of the sale of Casino Aztar to Eldorado Resorts.

Juding from the language that ColSux successor Tropicana Entertainment "have been in discussions regarding a possible alternative transaction" without avail, it appears as though new CEO Scott Butera wants to hang onto the riverboat property (whose on-shore facilities are leased, not owned, by the way -- a common ColSux practice). "(N)o alternatives exist that are suitable to both parties" sounds like a nice way of saying that if any other TropEnt properties were worth having, then they weren't on the table. Then again, given Nevada Gold's current financial situation, it might have been the one getting cold feet, but the formal language doesn't encourage that interpretation.

Either way, Butera's been making some expansionist noises of late and pining for the return of the Atlantic City Tropicana. While Butera has operational experience in that market, from his days at Trump Entertainment Resorts, it's exceedingly difficult to imagine New Jersey regulators letting TropEnt back onto the property so long as Yung has one thin dime of equity in the company.

More Trop tomfoolery

Tue, 16 Sep 2008 13:12:00 -0700

Justice Gary Stein's trusteeship of the Atlantic City Tropicana continues its slide toward disaster. The UAW has filed a charge with the National Labor Relations Board, accusing Stein of a lack of good-faith bargaining. Stein has said in the past that he's reluctant to bind a new buyer to the terms of a contract negotiated by a third party.

That was a viable argument back when it looked as though Stein could get the Trop sold by Spring or early Summer. Then he sniffily deemed the offers on the table not good enough (talk about failing to bargain in good faith!) and reset the whole process to "zero."

Given Stein's miserable, foot-dragging performance, it could be months more before long-suffering Trop employees have a new owner, in which case it's unconscionable to continue to allow this situation to fester. Heck, considering the speed with which Scott Butera was able to bring peace to the Las Vegas Tropicana, maybe letting him have the A.C. Trop back wouldn't be such a bad idea, after all. (Not that it's going to happen as long as sole shareholder William J. Yung III has so much as one thin dime of equity in Tropicana Entertainment.)

While restored Trop President Pam Popielarski has shored up the A.C. Trop's financial performance, some of the UAW's charges, if true, suggest she's working off the Columbia Sussex playbook: "denial of Family and Medical Leave Act benefits for dealers, changes to the casino floor, and unilaterally changing the attendance point system and start times for workers."

President Closed ... Again. For the third time this year, Pinnacle Entertainment's President riverboat has pulled up its gangway on account of flooding. Which means that the President will have lost at least 47 business days (and counting), depleting what is already a pretty attenuated revenue base. Given the President's fairly negligible contribution to the St. Louis casino market, perhaps Pinnacle should mothball the old gal. Having grown up near St. Louis, I can well remember the President in her glory days, resplendent upon the St. Louis riverfront. It's sad to see her come down in the world like this.

Note: In honor of Scott Butera's fresh start at the LV Trop and his efforts to put the 'ColSux' era behind him, I've started a new "Tropicana Entertainment" category, as a gesture of faith.